2.1. - Business Growth Flashcards
Internal growth
Internal growth is growth that helps the business expand by using its own resources like bringing out a new product
External growth
Where a business expands by using methods outside the business like buying out a competitor or merging with another business
How can a business externally expand
By buying out a competitor or merging with another business
How can a business internally expand
By bringing out new products or researching into development
Marketing mix
The marketing mix is the price, place, product, and promotion
Place
Where a product is sold and how assessable it is
Product
What the product is and what it does
Price
How much a product is and how affordable it is
Promotion
How well people see you product and where they see it
Gorilla advertising
Spreading awareness through different methods or strange methods
E-Commerce
Selling products through a website
M-Commerce
Selling products through a phone
Merge
Where two businesses join together to become one business under joint ownership
Takeover
Businesses buys another another business.
The manager of the dominant business will be in control
Advantages of internal growth
Relatively low risk
Builds on businesses strength
No risk of a clash of culture
PLC
A public limited company is owned by the shareholders. They have to produce there documents on how well their doing to show investors how well or bad they are doing
Shareholder
A shareholder is a person who invests into a business and buys out a part of a business. A major share holder is someone who owns a larger part of the business and can sack owners and have more power, a minor shareholder has less power but can still make profit on there share
Advantages of a PLC
Tend to be large stable companies
Enhanced reputation of the company due to PLC status
Gains exposure due to the stock market
Disadvantages of a PLC
Flotation is an expensive process and not guaranteed to be successful
Company is open to takeovers
Financial information is freely available to see
Take over debt
If a business is taken over, the businesses debt is also transferred over to who has taken over the business
Explain one benefit and one draw back of external growth
A benefit is that you can bring in the taken over business fan base to yours, so you can make more money, a drawback is that you can take on all there debt, so that is another cost to pay
Multinational
A business with operations in More than one country
Changes in business aims and objectives
A business aims and objectives will change depending on, market conditions, technology, performance, legislation, internal reasons
Degree of competition
The number and size of businesses competing in a particular market
