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Assess whether expanding by organic growth was the right decision for Mumtaz - Edexcel - A-Level Business - Question 1 - 2018 - Paper 2
Question 1
Assess whether expanding by organic growth was the right decision for Mumtaz. Mumtaz is an Asian food producer in Bradford. It is a private limited company owned an... show full transcript
Worked Solution & Example Answer:Assess whether expanding by organic growth was the right decision for Mumtaz - Edexcel - A-Level Business - Question 1 - 2018 - Paper 2
Step 1
Reasons for organic growth
Answer
Mumtaz Foods retains control, particularly as it is a family-owned business. This allows them to maintain existing management, structure, and culture, enabling effective planning and growth control. By entering the ready meals and Halal baby food markets, Mumtaz can expand its product range and open new restaurants and factories.
Step 2
Possible counterbalance to organic growth
Answer
Despite the benefits of organic growth, it may be slower due to the company's existing market position. Since Mumtaz has only gradually grown since its inception in 1979, this slow organic expansion may limit its current market opportunities. Furthermore, available resources for increasing organic growth are also a factor, as the company has historically relied solely on internal financing.
Step 3
Potential judgement
Answer
Overall, expanding by organic growth appears to be a valid strategy for Mumtaz, allowing it to maintain control and adapt services to market needs. However, it could miss faster opportunities in the ready meals market due to a slower growth strategy compared to competitors who may be expanding more rapidly.