Fast Growing Markets: Organic Vs Inorganic Growth Strategy

Benefits and considerations of inorganic vs organic growth strategy in fast, medium paced markets.

For any business successfully creating value within a market space, inevitably comes to the cross road where it needs to solve the dilemma of the “Build or Buy decision”! 

It is expected that depending on the sector growth as well as the company size, some generic trends would persist, for example a small sized enterprise in a medium paced growth environment tends to choose organic growth so as to sustain its core competencies and values with a less steep ramp up plan. Bigger businesses often choose a steeper ramp up plan especially in a fast paced high growing market, to decrease

its opportunity cost and be able to reap the early bird advantage.

Let market capitalization be the logical aim especially while pioneering in a new sector growing rapidly, but is it possible to merge it organically with groundbreaking innovation that is rapid enough?

Smaller businesses tend to be more careful here and work within the constraint of resources, funds...etc so that they are able to control and sustain the excellence in delivery. This approach works in a medium paced time proven sector or industry where the value delivered is better measured and perceived, with credibility of businesses being an important factor for long term value creation. However, for a new sector emerging rapidly, speed of innovation and rapid execution of excellence in business and value

creation, becomes a decisive edge.

Bigger businesses however face the dilemma of being the early bird to capitalize market rapidly with inorganic opportunities at the cost of cultural issues and integration strains. The prolonged time for success or the high failure rates of an inorganic move does point to the fact that besides market space coverage, it does take a perfect execution and integration to fall into place to make this successful.

 Either ways the buy or build decision is more a question of building innovation with home grown ideas or stealing the same from the market with a buy decision. The former has limits posed by the business size, competencies...etc. However, the latter has an equally difficult cultural integration to be coped with since the external ideas typically evolve in an environment different from the present business or company and is more prone to be resisted.

Apparently with limits to organic expansion and innovation speeds, inorganic  always provide options to businesses with strong fundamentals in cultural integration which can allow external ideas and innovations to thrive.

Looks like the future is going to bring in more evolved players who will be able to achieve both ensemble..!!

Please login to comment on this post.
There are no comments yet.
Intuitive Leadership: A Practice In Game Theory
Leadership Quotient: 5 Quintessential Tips To Outperform