2.1 growing the business Flashcards
what is internal growth
organic growth
business expands by itself
-introducing new products
-entering new markets
external growth
expands by joining with another business
inorganic
-mergers
-takeovers
public limited companies advantages
-ability to raise additional finance
- limited liability
- seen as more prestigious and more reliable
- maybe be able to negotiate better prices with suppliers
disadvantages of being a PLC
-more complex accounting and reporting procedures
- risk of hostile takeovers
- increased media attention
- accounts published
what is a multinational business
retailer having sales outlets in several different countries
advantages of being multinational
wider target market
cheaper labour abroad
spread risk of operations in different countries
reputation as a market leader
disadvantages of multinational
loss of focus on key markets
cultural language differences
uncertainty regarding profits
potential damage to reputation if found to be operating unethically
business aims and objectives changing reasons
market conditions
technology
performance
legislation
internal reasons
internal reasons can be…
different priorities of leaders
how globalisation effects businesses
imports
exports
business locations
international trade
buying and selling of goods and services between countries
tariff
tax imposed by a country on imported goods and services
trading bloc
created when a government of different countries agree to act together to promote trade among themselves
this gives member of the trading bloc benefits
