Organic Davis Service Group Case Study

The natural course of life for business is to grow. A company wants to grow to increase profits, to increase customer base, to increase its value, to innovate, to enter new markets, to build new product base, etc. The key is to develop, plan and execute a strong growth strategy. The strategy should outline what business or market to expand to, when to expand and how to expand. There are two ways in which a company can expand: Organically and inorganically (Growing a company by international acquisition, 2008). We will describe the ways in which Davis Service Group successfully expanded, how the European Union helped in the process, and how it helped Davis to face the challenges of international expansion.
Organic vs. Inorganic Growth
Organic
In 2002 Davis Service Group acquired Berendsen (inorganic growth), it was a strategic fit for Davis as Berendsen was the leading textile provider in Denmark, Sweden, Norway, Austria, the Netherlands, Poland, and Germany. By acquiring Berendsen Davis instantly got access to new markets and new customers, using existing networks in the new geographical area built by Berendsen. It was also able to increase its effectiveness due to the economies of scale, reduce the operating and fixed costs. Davis and Berendsen are also growing organically, building on their existing resources, as the EU markets are rapidly developing, needing new uniforms for their workers, new linens for hotels, etc. (Growing a company by international acquisition,
The Czech Republic has a very good strategic position being in the center of Europe. Berendsen already operates in the neighboring markets of Germany and Austria. From Germany or Austria, you can get quickly to the Czech Republic by car, train, bus, or plane. The Czech Republic is known for its skillful workforce. It is one of the most stable and prosperous markets with its gross domestic income per capita being one of the highest in Central Europe. It has some of the best infrastructures in Central Europe, there is £23 billion worth of EU structural funds available for 2014 to 2020 (Doing Business in Czech Republic: Czech Republic trade and export guide, 2015). Czech Republic is also a member of WTO so for example if Berendsen export linens to the Czech Republic hotels it will be exempt from the import duties. Due to the new standards and practices, the industry workers need to wear uniforms and protective clothes which is an area where Davis and Berendsen excel so there is definitely a market for them to expand to.
Conclusion
When a company decides to grow it needs to outline the plan, to build the best strategy. The company can grow organically or inorganically or by a combination of both. Davis needed to grow and cleverly decided to concentrate on what it did best: the textile maintenance business. Using the profits from their best operations the company was able to grow both organically and inorganically by