A business can have organic or inorganic growth.Let us see what these terms mean.
Organic Growth: Growth by use of EXISTING resources
A industry leader who have market monopoly and is in the process of optimisation and improvement of its business as well as resources is said to be in "Organic" growth.
These companies has a huge customer list,great skillsets,enjoys brand name by building using the "existing" resources. They may be in an weak economy where what matters the only way to grow is by effective resource utilisation
Inorganic Growth: Growth by acquisitions/merger
This is the strategy cash rich companies follow for taking attractive business ventures through a penny deal.Needless to say these industries may create mess within the organisation,the company board must have a feel that in the long run it may give huge benefits
For ex: Tata takeover of JLR& Corus etc at the short term seems to be an unwise judgement.
But the risk they may have now may wane in the coming years and with the powerful automobile infrastructure TATA has along with the huge customer base they enjoy- these businesses can later become the flagship industries in TATA family.
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