organic growth – The growth of a company achieved by improving output and sales by opening new locations, seeking new customers or producing new products as opposed to growth that comes from buying other businesses
(Pronounced or-gah-nik growth)
To remember what organic growth means use the following mnemonic:
The only difference between inorganic growth and organic growth is 'IN'.
If we think of IN as into buying other companies and interfering with the way they are run.
Organic has no 'IN' before it, so this type of growth has nothing to do with buying into different companies to expand and interfering with the way they are run, then the following statement makes sense:
Organic growth = Not 'IN'to buying other companies but expanding by opening new locations
Organic growth refers to a business relying on its own resources to expand instead of achieving growth through the purchase of other companies.
An example of a strong organically grown company is Domino’s Pizza, which at one stage was opening one new store per week. Others include Aldi and Lidl who open regularly new stores and operate independently with no thought of acquiring other businesses.
Some companies have a mixture of inorganic and organic growth.
Facebook expanded massively to become a corporate giant organically but has since bought other companies such as WhatsApp and Instagram to grow inorganically.