3.1.2 advantages and disadvantages of different growth strategies

Question 1

Organic Growth advantage

Answer 1

• Sustainable and controlled expansion.
• Lower financial risk as it relies on internal resources.
• Builds on existing strengths and expertise.

Question 2

organic growth disadvantages

Answer 2

• Slower growth compared to other strategies.
• Limited in terms of rapid market capture.
• Requires time and patience to see substantial results.

Question 3

Vertical Integration Advantages:

Answer 3

• increased control over the supply chain.
• Cost efficiencies through elimination of middlemen.
• Better coordination and quality control.

Question 4

Vertical Integration Disadvantages:

Answer 4

• High upfront costs for acquisitions.
• Potential for increased risk if the integrated supply chain faces challenges.
• Regulatory scrutiny and antitrust concerns.

Question 5

Horizontal Integration
Advantages:

Answer 5

• Rapid market share expansion.
• Elimination of competitors.
• Potential for economies of scale.

Question 6

Horizontal Integration Disadvantages:

Answer 6

• Integration challenges, such as cultural differences.
• Regulatory hurdles and antitrust concerns.
• May divert management’s attention from core operations.

Question 7

Conglomerate Integration advantages

Answer 7

• Diversification of risk across different industries.
• Capitalizing on unrelated opportunities.
• Potential for higher returns in diverse markets.

Question 8

Conglomerate Integration Disadvantages:

Answer 8

Complexity in managing unrelated businesses.
Limited synergies between diverse operations.
Difficulty in achieving economies of scale.