How Organic Growth Can Be Achieved Marketing Essay

How Organic Growth Can Be Achieved Marketing Essay Every penny earned by the enterprise are not all the same. Business growth is not the same, either through organic growth and growth by acquisition restructuring and other non-organic way, and the two are not the same. Rely on organic growth with higher gold content, although its growth may be slower, but better quality growth, earnings stability, certainty and more persistent, to give shareholders greater shareholder returns. so in hotel industry how to effective organic growth?the hotel sustained and stable development of thinking.the hotel is organic growth is actually a customer relationship management process,which is based on the retention of the existing customer sales growth,earnings growth and service improvement.superior hotel is always good to achieve growth in to those bad hotel often need to constantly replace customers,because they are totally dependent on the sales price.the hotel to maintain an effective way of organic growth is the formation of a consultant type of relationship with the customer,rather than price-type relationship. Body Organic growth is committed to enhance customer satisfaction, employee engagement, as well as the growth of the core business earnings, companies rely on innovation, new products and services, customer growth in the core business development and growth. Organic growth corresponds to the concept of non-organic growth (Nonorganic Growth), is the exclusion of mergers and acquisitions, divestitures and exchange rate effects of growth, reflecting the core business growth potential and persistence. Pursuit of organic growth does not mean that negate the positive significance of the mergers and acquisitions. Need strategic, a small mergers and acquisitions related to the core business, these acquisitions for the company access to new technologies, new products, new ideas, or new customers, particularly in relation to some of the early stages in the life cycle of the companys organic growth process product or technology. How organic growth can be achieved Diversification Diversification is the most radical form of growth. It involves creating a new product, a brand new market. This growth strategy is the most dangerous, because it is the most uncertain. Failure is a distinct possibility, but it may be the potential for a high return worth the risk, the company must provide sufficient financial means. Market penetration Through the growth of the market penetration does not involve moving into new markets, create new products, it is an attempt to use the current products or services, in order to increase market share. Implementation by reducing the price of the product or service, or by increasing marketing efforts to attract customers from competitors this strategy Product Development Product development to create new products to meet the same market. For example, a company producing ice cream institutional buyers, including expanded its ice cream and sorbet. The Company may sell these new products to existing customers and develop new markets and the development of its business. Market development Market involved in the development of your product or service to new markets. You may want to enter a new city, state or country. You can target a market segment. For example, a bakery, bread consumer market may enter the commercial market toast restaurants and retailers. External methods Merger is defined as combination of two or more companies into a single company where one survives and the others lose their corporate existence. The survivor acquires the assets as well as liabilities of the merged company or companies. Generally, the company which survives is the buyer which retains its identity and the seller company is extinguished.Merger is also defined as amalgamation. Merger is the fusion of two or more existing companies. All assets, liabilities and stock of one company stand transferred to transferee company in consideration of payment in the form of equity shares of transferee company or debentures or cash or a mix of the two or three modes. The combined disadvantages. The drawback is that the merger must be approved by a vote of the shareholders of each company. Under normal circumstances, the approval of the necessary two-thirds (or more) of the stock. To obtain the necessary number of votes, that is time-consuming and difficult. In addition, the cooperation of both the companys existing management requires a combination of. Such cooperation can be very easy or cheap. In addition, if the enterprise scale, resulting in higher unit costs. It will also create a cultural conflict between the different types of enterprises. Therefore, this time of the validity of the integration. Merger also may be creating a conflict of objective between different businesses, meaning decisions are more difficult to make and causing disruption in running of the business. It also results dissatisfaction among current staffs as positions will be limited and the management have to decide which staffs to hold the position after the transaction has taken place. Organization merger would provide loads of benefits to both parties. Each party should ensure that the transaction made benefits all parties involved, and not biased to either party before seal the deal Acquisition in general sense is acquiring the ownership in the property.In the context of business combinations, an acquisition is the purchase by one company of a controlling interest in the share capital of another existing company. An acquisition may be affected by (a) agreement with the persons holding majority interest in the company management like members of the board or major shareholders commanding majority of voting power; (b) purchase of shares in open market; (c) to make takeover offer to the general body of shareholders; (d) purchase of new shares by private treaty; (e) acquisition of share capital or one company may be either all or any one of the following form of considerations viz. means of cash, issuance of loan capital, or insurance of share capital Assets Acquisition Disadvantages Choose another companys assets, liabilities and consideration, they can be an expensive and time-consuming process. It need the financial assessors to identify and assess the value and risk of the underlying assets (or liabilities). In addition, your legal team must also arrange the transfer of assets and liabilities of the individual ownership. Therefore, the cost of an assets acquisition can become significantly larger than the nominal value of the purchased assets/liabilities. Stock Acquisition Disadvantages In stock acquisitions, when assets are not scrutinized, it is not impossible for the buyer to acquire so-called toxic assets. The value of such assets has considerably fallen or is highly likely to fall in the near future but buyers cannot be aware of this until they possess them. Such assets can be bank deposits in weak currencies and leisure facilities in areas recently struck by natural catastrophes. In addition, stock acquisitions dont feature any of the tax deductions on goodwill. Franchising is a commercial form of organization and the operating system, a number of enterprises refers to the operation of similar goods or services, to form a consortium in a certain form, in the overall planning specialization and division of labor based on the implementation of centralized management, the combination of independent business activities into the overall scale of operation, so as to achieve economies of scale. A business model. Franchise drawbacks: the franchisor is concerned, due to the the management network organizations increasingly large, was chartered by product and service quality is difficult to guarantee unified standard, may lead to the reduction of the standardization.In addition, due to the long-term cooperation between the franchisees and the contradictions increase prone to conflict.And, by the promise, he must pay the initial fee and management fee to the franchisor by the Corporation based on the consideration of the overall operation of the ideas developed strict Limitations and restrictions, and requirements at any time may bear all the consequences of the reduction of the Corporation brand value of their adverse effects caused by What are the advantages of organic growth in business? A business grow organically means that the company is using internal funds to expand the business, rather than purchasing another business or other partner-sharing business. An example of organic growth will be increasing capital using own money. Below are some advantages of organic growth: 1. Organization strategic goals can be achieved Through organic growth, the management team are able to guide and lead the business according and in-line with the strategic goals of the company. For example Regulate the organization and management. Chaotic most of the organizational structure of the commercial enterprise, for example, is responsible for market planning and responsible for sales to the same person, and even the accountant and cashier is a person. There is a superior-subordinate reporting relationship is not clear, the employees do not know which department they belong, do not know their own boss, cross management of severe and so, it would not affect the efficiency of the organization, do not know their respective duties or tilt energy affect efficiency, seriously affect the companys next phase of development. Contrary China Jiaming commerce company, according to the characteristics of the companys external environment and the target is divided work departments, often look at the organization of the company, adjusted according to the requirements of the next stage of development suitable sector jobs, set up various positions or posts, to clarify their respective responsibility, and grant the appropriate authority; formulation of rules and regulations, establish and mutual relationship of the various aspects of a sound organizational structure aspect. 2. No crashes in culture There will be no culture clashings as the company employees are all either hired from the start of the business or being transfered to the newly setup business. the culture and norms of the business will be maintained. For example:Harvard University experts found that environment, lack of motivation, the potential for employees only play 20% to 30% and may even cause the opposite effect; appropriate incentive environment, the same staff was able to play to their potential.80% to 90%. If you disagree or feel taken for granted by the staff of the distribution system, then you have the distribution system must be failed; while failing to achieve the allocation of the incentive effects for enterprises, is a great damage. 3. Cheaper compared to acquisitions very often when a company buys another business. theyll need to pay a premium, and that premium itself can sometimes wipe out the whole value of the acquisitions rather than increasing shareholders value. For example The worlds largest food company Nestle Group in Shanghai on October 18 released three quarterly. Despite the global economic downturn, Nestle remains optimistic about the performance of the first three quarters of this year, the Nestle Group the first three quarters of the total sales growth of 11% to 67.6 billion Swiss francs. Organic growth (excluding exchange and acquisitions factors) of 6.1%, including real internal growth of 2.9%, 3.2% pricing contribution. Success with organic growth takes a lot more than ideas,or even great ideas.it takes galvanizing leadership and a sustainable growth engline.it takes deep understanding of key concepts and a robust managerial process it also takes a groundswell of employees who can skillfully apply all the necessary techniques and tools of innovation-not just the mind-expanding ones. THE TIFFANY STORY:GROWTH WITHOUT COMPROMISE Tiffanyco.is an interesting story for several reasons.first,tiffany is one of the oldest of the companies,having been founded in 1837 by Charles L.Tiffany,It has mostly prospered during the last 168 years,which is an accomplishment in itself given that the average lifespan of a major corporation today is less than 40 years. The second interesting fact is that Tiffany stayed true to its founders vision of creating and selling fine good to its customers in the famous Tiffany blue boxwhich was introduced in the 1800s.No,the blue boxis not a recent Madison Avenue creation;it,too,has survived more than 100 years. Part of the reason for Tiffany s longevity and success has a lot to do with its leadership,which exhibits an understated passion,respect,and reverence for what Tiffany stands for.Despite the companys luxury brand and up-scale image,the companys luxury brand and up scale image.the company leaders are far from arrogant or highbrow.Instead,they are thoughtful,down to earth,focused,humble people who are grateful for the opportunity to try to preserve and enhance the Tiffany brand during their tenure.In demeanor,the Tiffany executive team is no different from the SYSCO or Best buy team focused,humble leaders deeply engaged in the details of executing the business. ORGANIC GROWTH STRATEGY Tiffanys organic growth story is an annual combination of measured geographic expansion,new-product introduction,value-chain enhancements,and giving customers more reasons to buy Tiffany products,Tiffany grew classically first through store expansion in the United States,today,Tiffany operates 59 stores,26 of which are in the top 50 U.S markets,and the company cautiously and measurebly opens four to six new stores a year.After expanding in the United States,Tiffany opened its first store in Europe. In Europe,Tiffany faced tough competition from other legendary and historical fine jewelry houses,although it had more success in Japan,its largest international foray,which has grown substantially in the last 30years. In addition to geographic expansion,Tiffany created new revenue by introducing major new product lines annually in silver,gold and platinum jewelry.Tiffanys move to be a vertically integrated company in order to protect its brand and its quality has brought Tiffany new profit centers,including diamond cutting,diamond polishing,and manufacturing. Tiffany then expanded its channels of distribution to the Internet,first in the United States and more recently in Japan,the United Kingdom,and Canada. Then it closed its wholesale business,reduced its business sales offerings and made two small acquisitions,including the little Switzerland chain of Caribbean jewelry stores.the company also made three entrepreneurial investments-two in developing new diamond mines in Canada and one in starting a new pearl jewelry chain called IRIDESSE. Tiffany has invested heavily in technology throughout its value chain in order to operate more efficiently and today is concentrating on customer relationship management to increase revenue. THE BSkyB GROWTH STORY The BSkyB growth in the UK, how to establish an internal (or organic) growth, rather than rely on the acquisition of a typical example.A few years ago, when the position of the company for their own, seems to be a fairly ambitious business goals. The goal is to home users reached 100,000 in the UK. British Sky Broadcasting to achieve this goal earlier than expected, which is a key reason why, despite the recent economic downturn, they are still able to enjoy the continued growth of revenue and profits.However, the organic growth story in the British Sky Broadcasting is about more than simply adding a lot of new users. The business is able to increase its services to the average spent by each user household. Users at a lower pay-TV users have been persuaded to buy their broadband Internet access has been upgraded to HD and 3D from BSkyBs customers, improve customer loyalty has left the year known as churn percentage. The result of this organic growth strategy seems to be a business that has maintained impressive momentum despite a difficult external environment (e.g. pressure on household spending advertising). THE BEST BUY STORY Best Buy is one of the enterprises to filter through all seven steps, the main consumer electronics, home office supplies, electronics, retail entertainment software and related services. Best Buy as a typical representative of one of the organic growth companies, focusing on business development and innovation since its inception, although the scale is bigger and bigger, but remains efficient small businesses with employees cohesion. A hundred Best Buy stores are like a small company, every morning the manager in charge of the shop the day before the performance data receive 30 different indicators of green, yellow and red mark, all of these indicators and shops The investment margin closely related. Each day, the Regional Manager will manager discuss those yellow (warning) and red (problem) indicators, with the help of the technology under rely on estimates System to achieve a daily feedback and concerns of key data. Best Buy emphasis on stable working environment for employees, in crease employees on the company identity and ownership spirit, at the time Best Buy employees wastage rate than the industry average low of 20%, target more is in the short term is the staff wastage rate control to 50% below the industry average, it is the efforts made à ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â€š ¬Ã‚ ¹Ãƒ ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â€š ¬Ã‚ ¹in improving employee satisfaction and enthusiasm, the Best Buy business expansion while still being able to ensure strong execution capability of the entire enterprise. Best Buys stock price in January 1996 was 1.6945 CNdoller, 34.8267 CNdoller in December 2003, eight years, the share price increased 19.55 times the annualized growth rate of about 145%, organic growth enterprise stock investment value. Best Buy organic growth, to determine the success of many traits common organic growth enterprises, such as a streamlined business model, efficient implementation capacity, management closely tracks reflect the results of the data. With organic growth, core growth, knowledge and understanding, many companies realize that only the organic growth is sustainable, have begun efforts to improve the inherent profitability of the center of gravity from epitaxial growth dependent on mergers and acquisitions into existing business development and innovation. GE, Siemens, Schneider Electric, many large-scale multinational enterprises in addition to the common financial indicators in its annual report, also released this indicator of organic growth, reflects the universal recognition and attention of the business community on organic growth. Conclusion Every penny earned by the enterprise are not all the same. Business growth is not the same, either through organic growth and growth by acquisition restructuring and other non-organic way, and the two are not the same. Rely on organic growth with higher gold content, although its growth may be slower, but better quality growth, earnings stability, certainty and more persistent, to give shareholders greater shareholder returns. Secondly, a new perspective view of enterprise valuation. Our valuation to the enterprise, is generally given the higher valuation of the faster growth of the enterprise, the concept of organic growth stresses valuation level not only depends on the growth rate, but also depends on the sources of growth, quality and manner. Often persistent organic growth is better, should have a higher valuation; lot depends on mergers and acquisitions, financing growth, surface high growth rate, but the stability of the persistent poor, low return to shareholders, therefore, no should be given too high a valuation, before we are likely for some low-quality growth to pay too high a price.