Growth Strategy in Dispute at Traffic Clothing PLC

1. Use the case study to explain the difference between 'internal' and 'external' growth.

The main difference between internal and external growth is that internal growth is done within a business or a company while external growth is described as marging of two or more different companies. Therefore, it's done outside of a particular business. Using the case study, an example of internal growth would be the opening of low-cost factories in developing countries. On the contrary, taking over another clothing producer or material supplier would be an example of external growth. To be more specific, an example of the external growth would be a merger of the company with a prestige clothing retailer.

2. Explain how the business increased sales revenue, yet gained no increase in profits for the last three years.

Opening low-cost factories in developing countries helped to increase sale reveneu. However, there was no increase in profits for the last 3 years, This was due to several factors. For example: new competitors entered the industry and drove down prices. Another reason for no increase in profit was the rapid increase in prices of raw materials. Lastly, there was an increase in ther bargaining power that was done by the number of mergers between retailers.

Questions number 3 and 4 are higher level questions!