Question

which route is better organic or aquisition in mergers?

Answer 1

To answer this question we need to be clear about both the options which lead to growth for the companies.

We will se Pros & cons of both in order to answer this question and have the understanding about it.

Pros & Cons of Organic route of growth:

• We we follow oganic route for the growth of the businesses, we have the complete control over it and we say and feel what is fit for it.
• There are many setbacks that we have to gone through while thriving towards the growth, but if you are consistent with your efforts it will becomes successful no doubt.
• Apart from the functional and operational growth it will bring pride when the business will be successful.
• It all depends are the needs what can be necessary for the growth.
• It is very slow, and will take years to grow and establish.
• We can take an example of McDonald's which followed organic route and starting from one store it has now established its store around the globe.

Pros & Cons of Mergers & acquisitions:

• It gives the speed in the process of growth of the businesses. It comes with a number of benefits like, easy availability of funds for the expansion and makes growth sustainable.
• Open ways for easy penetration of markets as it was established by the company earlier.
• Ehances the reach, influence and awareness about the company and its offerings.
• Whereas execution of this strategy is the main challenge and it depends on the sustainability of the growth.
• It can give quick results, but poorly executed strategy can be a way towards the bankruptcy of the company. It also leads to several management challenges like, employee turnover, etc.
• Example, we can consider the Disney's acquisition of Pixar which paid off with a massive hits on the boxoffice.

Here is the conclusion from the above, it all depends on the individual businesses needs, what we are thinking to achive can be achived by the startegic move or not. There is nothing right or wrong answer for this question, it only depends on the decision maker how they see the future growth along with these strategic moves.