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What are the trade-offs between an internal and an external growth strategy? The
Subject
Business Finance
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The pros and cons of internal strategies are as follows. The pros are that the business can expand its operations internally because the company understands its product or services and can identify how the operations can grow. Another pro is that if the business is losing money within it's organization then the business can make strategic changes to cut costs within that operation. Also, the business can maximize profits by creating ways to increase sales within the organization. The internal cons are that management may be hesitant to make changes without a good strategic plan which can sometimes take time to create. Another con is that the business make take too long to create new products that will increase sales and profit.
The pros of external strategies are that the company can grow quicker and can build partnerships. The company can grow quicker by expanding its products and services to be utilized with other companies that will lead to an increase in profits. If another business likes the product your business is using then the company can definitely grow. Also, building partnerships can help get the business reach a global scale. Connecting with a company in China may help market the business and bring in more stakeholders. The cons are that it can be costly and sometimes it is hard to trust other companies with privy information.
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