organic growth, sometimes called internal growth. Organic growth occurs when a business grows by selling more products or services. Ansoffs matrix outlines four ways this can be achieved:

market penetration selling more of its products to existing customers market development selling its products to a wider market, either at home or abroad product development increasing the product portfolio by selling new products or services to existing markets diversification selling new products or services to new markets. Organic growth is a long-term strategy. It is a lower risk growth strategy than inorganic growth as it is building on the companys strengths to increase sales.

Disadvantages of Organic GrowthYou may have limited resources for growing your own business. You may also find that the marketplace will not allow you to grow beyond a certain point. In addition, your plans for your own growth can be thwarted by competition, causing you to cut back expectations and consider the possibility of having to close down due to limited opportunities. Growing a business from the start-up stage means constantly struggling to make sure you have positive cash flow in order to pay your bills and payroll, as well as finding ways to grow sales. While these concerns exist if you join with another company, the larger size of the combined organization provides better cash flow and sales growth because of a larger customer base.

Inorganic GrowthGrowth in a company's operations that is due to mergers or takeovers as versus from an increase in the actual business activity of the company itself. Companies that decide to expand inorganically can have access to new markets due to these mergers or acquisitions.

Strategic AllianceA strategic alliance in business is a business relationship between two or more businesses that enables each to achieve certain strategic objectives neither would be able to achieve on their own. The strategic partners maintain their status as independent and separate entities, share the benefits and control over the partnership, and continue to make contributions to the alliance until it is terminated. Strategic alliances are often formed in the global marketplace between businesses that are based in different regions of the world.Advantages Share the risks working in partnership allows you to offset your market exposure. Opportunities for growth access to your partners distribution networks may help you gain market share faster than if you go it alone. Focus on your core strengths a good partner will offer complementary strengths, which can free you up to focus on the areas your business does best. For example, you can focus on product development while your partner focuses on sales and marketing. Access resources your partner may be able to help you by giving you access to resources such as specialised staff, finance and technology. Access the target market working with a local partner may be the only way you can access your target market.

mergerA merger occurs when one corporation is combined with and disappears into another corporation. A merger is a distinctive, technical term of a particular legal procedure that could or could not happen following an acquisition.advantages of a merger1. To acquire a larger share of an existing market.2. Enter new markets.3. Eliminate competitors.4. Acquire expertise or assets.5. Transfer skills.6. Save costs.7. Increase efficiencies or capitalize on synergies. 8. The main reason for companies to enter into such arrangements is to consolidate their power and control over governments and markets.

Advantage of acquisition are : Speed :It provide ability to speedily acquire resources and competencies not held in house.It allows entry into new products and new markets.Risks and costs of new product development decrease. Market power :It builds market presence.Market share increases.Competition decrease.Excessive competition can be avoided by shut down of capacity.Diversification is aggrieved.Synergistic benefits are gained. Overcome entry barrier :It overcomes market entry barrier by acquiring an existing organization.The risk of competitive reaction decrease. Financial gain :Organization with low share value or low price earning ratio can be acquired to take short term gains through assets stripping. Resources and competencies :Acquisition of resources and competencies not available in house can be a motive for merger and acquisition. Stakeholder expectations :Stakeholder may expect growth through acquisitions