3.1.2 Business growth

Question 1

Organic Growth:

Answer 1

organic growth is the process of a business expanding its operations internally, relying on its own resources and increasing sales and revenue gradually over time.

This can include expanding into new markets, introducing new products or services, and increasing market share.

Question 2

Horizontal Integration:

Answer 2

orizontal integration occurs when a company acquires or merges with competitors or businesses in the same industry. This strategy aims to increase market share and reduce competition by consolidating similar businesses.

mcdonalds and kfc

A fast-food chain acquires a competitor fast-food chain (same industry and stage of production).

Question 3

Conglomerate Integration:

Answer 3

Conglomerate integration involves a company diversifying its operations by acquiring businesses in unrelated industries.
This strategy is often used to spread risk and take advantage of opportunities in different markets.

A car company buys a soft drink manufacturer (unrelated businesses).

ford and coca cola

Question 4

What is Forward Vertical Integration?

Answer 4

Forward vertical integration is when a company expands by acquiring distribution channels or retailers, moving closer to the consumer.

Example: A car manufacturer buys a dealership.

Question 5

What is Backward Vertical Integration?

Answer 5

Backward vertical integration is when a company expands by acquiring suppliers or producers, moving further up the supply chain.

Example: A car manufacturer buys a steel supplier.

Question 6

What is Vertical Integration?

Answer 6

merging with firms at different stages of the production processes