External growth offers a company the opportunity to prosper by expanding its market presence or by strengthening its position within its value chain.
Opting for external growth represents a powerful lever for accelerating development. This is the preferred solution for companies seeking to rapidly consolidate their market position, whether by:
- Conquering new geographical areas,
- Enriching their range of products or services,
- Enlarging their footprint both upstream and downstream of their value chain.
This strategy is particularly useful in the following sectors:
- mature,
- highly competitive,
- highly dependent on technology
- or requiring specific administrative authorizations (e.g. ICPE).
Barriers to entry make it harder to set up or grow a business. Company acquisitions or joint ventures facilitate development in these markets.
These operations can also alleviate a lag in innovation or a missed strategic change in the company’s history. Absent expertise is integrated via acquisition, particularly when large groups acquire start-ups.
Finally, external growth makes sense for developing activities abroad, offering the acquirer a better understanding of new markets via the acquired company.