1.5 And 1.6

Question 1

What are some positives of growing internally

Answer 1

Keep control
Keep culture

Question 2

What are some positives of growing externally

Answer 2

Quick way to grow
Skills from both businesses

Question 3

What are some negatives of growing internally

Answer 3

Slower
Less known

Question 4

What are some negatives of growing externally

Answer 4

Loss of control
Take on other firms costs

Question 5

What is a merger

Answer 5

Is when 2 or more businesses agree to join together

Question 6

What is a takeover

Answer 6

When a business takes a controlling interest (50%+) in another business

Question 7

What is organic growth

Answer 7

Is the growth internally by increasing sales . Sales can be increased in a number of ways

Question 8

What can growing organically / internally do

Answer 8

Increase output
Increase in market share
Developing new products
Gaining new customers

Question 9

Name the 4 types of merger / takeover

Answer 9

Horizontal
Backwards verticals
Forwards vertical
Diversification

Question 10

Explain horizontal merging/takeover

Answer 10

When 2 businesses join together and are the same type of business

Question 11

Explain backwards vertical merging/takeover

Answer 11

Joining with a supplier

Question 12

Explain what forwards vertical merging/ takeover is

Answer 12

Joining with the shop selling the goods

Question 13

Explain diversification merging/takeover

Answer 13

Joining sign a business with no connection to current business

Question 14

What is an advantage of horizontal merging /takeover

Answer 14

Bulk discounts
Removes competition

Question 15

What is an advantage of backwards verticals merging / takeover

Answer 15

Control over the supply
Reduces cost

Question 16

What is an advantage of forwards vertical merging / takeover

Answer 16

Ensures somewhere to sell

Question 17

What is an advantage of diversification merging / takeover

Answer 17

Spreads risk

Question 18

What is a disadvantage of horizontal merging / takeover

Answer 18

Loss of control

Question 19

What is a disadvantage of backwards vertical merging/ takeover

Answer 19

Loss of control

Question 20

What is a disadvantage of forwards vertical merging/ takeover

Answer 20

Loss of control

Question 21

What is a disadvantage of diversification merging / control

Answer 21

No understanding of new activity

Question 22

Example of horizontal merging / takeover

Answer 22

Kraft or Cadbury

Question 23

Example of backwards vertical merging / takeover

Answer 23

Innocent smoothies buying farms

Question 24

Example of forwards vertical merging / takeover

Answer 24

A shoe manufacturer taking over schuh

Question 25

Example of diversification merging / takeover

Answer 25

Nestle buying a broadband company

Question 26

What are stakeholders

Answer 26

Groups or individuals thag have an interest in the business

Question 27

What are internal stakeholders

Answer 27

Business owners and people who work in the business

Question 28

What are external stakeholders

Answer 28

The local community , suppliers , customers and government

Question 29

What is a stakeholder group

Answer 29

Are owners , employees, customers , suppliers , government and local community

Question 30

What do the main stakeholders of a business want

Answer 30

Customers - **low prices good service , provide product or service** Owners -**depends : profit , growth or security** Employees- **security , pay , good working conditions** Suppliers - **regular orders that are payed on time ** Government- **pay taxes , create jobs ** Local community -**provide jobs and no pollution **

Question 31

Who are the main stakeholders of a business

Answer 31

Customers Owners Employees Suppliers Government Local community

Question 32

What’s the effect stake holder have on the business from the owners

Answer 32

Focus on profit , may make redundancies , may want to grow

Question 33

What’s the effect stake holder have on the business from the employees

Answer 33

Can go on strike , pressure for good pay

Question 34

What’s the effect stake holder have on the business from the customers

Answer 34

Cannot survive without customers , price / quality

Question 35

What’s the effect stake holder have on the business from the suppliers

Answer 35

Quality of goods , reliability of supplier

Question 36

What’s the effect stake holder have on the business from the government

Answer 36

Changing taxations levels (. Income tax / tax on business ) , Grants , law changes , spending

Question 37

What’s the effect stake holder have on the business from the local community

Answer 37

Protest regarding environment / impact