Crecimiento orgánico o mediante fusiones y adquisiciones: ¿Cuál estrategia debería elegir mi empresa?

Growing your business sometimes is about scaling and expanding; Other times, it’s about breaking into new markets or developing new products. But in all cases, growth is about increasing the value of the business. This increase in value can occur in two ways: Organically, as a natural development of your business plan, or through a Merger or Acquisition.

But how can you know which growth strategy is the most appropriate for your company?

The first step is to define your goals. Ask yourself: What do you want for yourself and your business? Because the job of any strategy is to help achieve it. Think about short and long term goals and objectives, these will help you point towards the right growth strategy to choose.

What is organic growth?

Organic growth is a natural continuation of your business, it arises naturally from your established business, such as:

  • Sell more of your current products to existing customers.
  • Develop new markets, usually through geographic expansion.
  • Create new products, it can be as simple as creating a new color or size.
  • However, organic growth does not just happen by itself. Growing organically is still a deliberate act, which requires you to have a well thought out strategy and a clear plan to grow in a way that makes sense for your business and is in line with your goals.

What is inorganic growth?

This type of growth refers to growing through mergers and acquisitions. Which ensure faster growth, but with greater risk.

Growth through mergers and acquisitions can speed up your time to market with new capabilities or offerings. Instead of developing a product from scratch or retraining your team, a business acquisition can give them access to that stuff out of the box.

People have a feeling that organic growth is cheaper, but sometimes creating a new net supply can end up being more expensive than acquiring it. However, entrepreneurs taking the acquisition route should be alert and prepared: integrating two companies can be complex, and results in the first few years often fall short of overly optimistic expectations.

What are the main differences between these two types of growth?

Once the main differences between these two types of growth have been analyzed, it is important that you take into account certain parameters to make the right decision. Therefore, here are some recommendations to take into account:

Planning is key. Regardless of how you intend to grow, it is important that you have a plan. You must account for the current state of the business and consider the impact that growth will have on the company.

Creating a growth plan will help you identify and prioritize the best opportunities that you can take advantage of as quickly as possible. The premise is that a company cannot take advantage of all the opportunities that are presented to it, so it must prioritize the most necessary ones.

A good plan will help highlight where and how you can think about growing. It forces you to be realistic about your existing systems, processes, and capabilities. If you see that you’re missing a critical capability, then you need to ask yourself: Should we develop it in-house or get it quickly through acquisition?

Have a well-thought-out strategy and clear plan to ensure you grow in ways that make sense for your business and align with your goals.

While planning is important, it’s important to stay flexible.

You need to know what’s going on that could threaten your business and adjust your plan accordingly so you don’t get caught in a bubble or left behind as your industry evolves.

Finally, you don’t have to, and shouldn’t, make growth decisions alone. Surrounding yourself with objective and trusted advisors that you can call on for support will help you see the big picture and provide additional perspectives to steer you in the right direction. In the end, it’s rarely a question of whether to farm organically or inorganically. It’s a balancing act. You never want to stop growing organically, but you always want to be ready to take advantage of acquisition opportunities that support your goals.

At Fiduvalor we have market experts who will help you determine the best option for your company based on your needs and current situation.

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