3.9.1 Flashcards
What’s the difference between a takeover and merger?
Merger is when two business form into 1 whereas takeover is when a business buys more than 50% of shares
What is venture?
Are small businesses or projects that are set up by existing businesses to make a profit
What is a joint venture?
Businesses share their resources but there is no change in ownership between the businesses.
What is horizontal integration?
When a firm combines with another firm in the same industry at the same stage of production process.
What is vertical integration?
Happens when a firm combines with another firm in the same industry but at different production process eg retailer taking over a manufacturer.
4 reasons why a business might base its grow strategy externally?
-they want to diversify, gain experience with those employed by the business they combine with.
-reduce competition
-benefit from economies of scale
-technology