Page 2: Growth
Growing a business can involve increasing:
- turnover (the value of sales)
- size and share of the market
- number and range of products
- company's geographical spread
- number of employees.
When a company grows it will expand into areas that offer new opportunities. It will also cut back in areas that are not performing as well or are in permanent decline. A company can grow internally by ploughing back profits into the business and building on its successful areas. This is organic growth. A business can also grow externally by taking over other successful businesses. Beiersdorf engages in both types of activity. It concentrates, however, on organic growth. This is not surprising. The NIVEA brand is so well known worldwide that it makes sense for the company to build organically on an established success story. Beiersdorf's recent developments illustrate three main ways in which firms can achieve organic growth. It has done this by:
- Developing new product categories, e.g. NIVEA FOR MEN.
- Moving into new countries. Since the 1980s, Beiersdorf has expanded into many Eastern European economies. Today, it has a growing presence in China, a rapidly expanding market.
- Expanding market share in established markets. NIVEA has continuously expanded its share of the Lipcare market over a number of years, despite the fact that previously this market was quite a mature and established one.