MARYAM AFZAL

GHULAM MURTAZA

SAFEER ALI

GROUP

Business Growth

Introduction!

Growth is an important business aim. Growth enables a business to maintain a sharp competitive edge compared with rivals and to benefit from other advantage such as lower cost and greater brand awareness among consumers .

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Main idea.!

Growing a business requires research and planning.

DefinitionTo Business growth

Any firm whose business generates significant positive cash flows or earnings, which increase at significantly faster rates than the

overall economy.

Ways of Business Growth

Managing GrowthA money manager who looks to buy stocks that sell at high price/earnings ratios because of the potential for high earnings growth.

Management structure ownership/controlchanging roleeconomies of scale

Management structure

Financing GrowthGrowth Finance is a company’s use of debt, equity and hybrid financing techniques to achieve business expansion in a cost-effective manner.

Cashflow

Low profitOver investmentSeasonal demand

Internal sourceCurrent Assets

Retained Earnings

Fixed Assets

External source

Issuing equities &bounds

Long term obligation

Short term debts

Overtrading

High taxation

Over-investment in fixed assets

Internal GrowthInternal Growth Rate' The highest level of growth achievable for a business without obtaining outside financing.

Internal Growth Internal growth can come from:

Innovation – new product development, new processes, new systems, etc. which can improve the efficiency of the firm

Competitive Advantage –the means by which a firm is able to make itself stand out from its rivals – innovation could be one source of competitive advantage

Others might include:

After sales serviceQualityPrice

External Growth

the growth of a firm by buying other companies, rather than by expanding existing sales or products.Opposite internal growth

TakeoversOne firm buying/securing a controlling interest in another, the taken over firm may lose its identity

ExampleL'Oreal and the body shop

MergersThe amalgamation of two or more firms

Each firm may retain some degree.

Example.

Metro and Macro