business chapter 3 definitions (enterprise, business growth and size)

Question 1

entrepreneur

Answer 1

a person who organises, operates and takes the risk for a new business venture

Question 2

business plan

Answer 2

a document containing business objectives and important details about the operations, finance and owners of the new business

Question 3

capital employed

Answer 3

the total value of capital used in the business

Question 4

internal growth

Answer 4

occurs when a business expands its existing operations

Question 5

external growth

Answer 5

when a business takes over or merges with another business. It is often called integration as one of the businesses is integrated into another one

Question 6

takeover / aquisition

Answer 6

when one business buys out the owners of another business (the business which has taken over)

Question 7

merger

Answer 7

when the owners of 2 businesses agree to join their businesses together to make 1 business.

Question 8

horisontal integration

Answer 8

when one business merges with or takes over another one in the same industry at the same stage of production

Question 9

vertical integration

Answer 9

when one business merges with or takes over another one in the same industry at a different stage of production

Question 10

Conglomerate integration / diversification

Answer 10

when one business merges with or takes over a business in a completely different industry