The growth of a company is one of the major concerns of the leaders of SMEs, large companies or entrepreneurs. The lack of growth is the result of a lack of innovation and a difficulty to increase the customer portfolio. The decline phase can happen very quickly...
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To illustrate with a concrete example. The sales of the luxury giant LVMH, in the Fashion and Leather Goods business, achieved an organic growth of 18% in the first quarter of 2023. Among these factors, we could see that Christian Dior is continuing a remarkable performance across all its products and we could see the official opening of new shops by Fendi, in Tokyo and Seoul.
Organic growth, known as organic growth, is more stable than strategic growth. Thus, growth is possible thanks to your actions, your decisions and your internal strategies within the organization. This type of growth can be achieved through different types of actions: material and logistical development, expansion of the product or service offering, increase in the scope of activities and the acquisition of new internal skills.
In the short term, organic growth is low-risk, as it requires not much investment. In the long term, these investments allow the company to continue to earn profits by using its own resources to develop defined activities.
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The LVMH group also uses strategic growth. It is buying back shares to cancel them later, from March 2023 until July 20, 2023. This strategy cost a total of 1.5 billion euros and is producing record profits for large groups.
Strategic growth is when you buy or merge with another organization. It is the product of a business acquisition strategy, and it requires capital. A good command of operational processes is essential to accelerate the payback of the transaction and restart the strategy, if desired. In strategic growth, more than half of all acquisitions fail to deliver on the promises anticipated at the outset.
Strategic growth is usually the result of acquiring a company, while organic growth is the result of the organization growing itself. It is entirely possible to operate with both growths. However, strategic growth requires a higher cost and is a less stable investment. If you are a fan, we recommend organic growth instead.
At KODD Korner, we help you to build your business through organic growth marketing. We are a 360° consulting agency. We offer 3 complementary services to help you grow your business. Growth marketing is the key to our expertise !