3.2 Business Growth Flashcards
1
Q
Economies of Scale
A
Decrease in costs as business increases in sales
2
Q
Two Kinds of EOS
A
Technical
Purchasing
3
Q
Diseconomies Of Scale
A
Increase costs as business increases in size
4
Q
Overtrading
A
Doesn’t have fincancial resources to support quick expansion
5
Q
Inorganic Growth
A
Merging or taking over another business to achieve expansion
6
Q
Merger
A
Bring two firms together
7
Q
Takeover
A
Company buys more than 50% shares of another company
8
Q
Lateral Integration
A
Different business but similiar
9
Q
Horizontal Integration
A
Smae business
10
Q
Backward Vertical Integration
A
Supplier
11
Q
Forward Vertical Integration
A
Customer
12
Q
Conglomerate Integration
A
Completely different business
13
Q
Organic Growth
A
Expanding busines naturally
14
Q
Types of Organic Growth
A
- new cusotmers
- new producst
- new markets
- new business model
- franchising
15
Q
Reasons To Stay Small
A
- product differentiation
- lower costs
- flexibility
- customer service
- e-commerce
