Business Growth Flashcards
Give some examples of business growth?
A greater market share for the business
Higher sales and profits
A greater number of employees in the business
The business has increased in value or expanded
Define the term internal growth?
The business grows slowly increasing output and slowly reinvesting its profits into itself.
Define the term external growth?
If a business grows quickly by Merger or Takeover.
What is the difference between a Merger and a Takeover?
A merger is when a business joins with another business, it is a mutual decision.
A takeover is when another business buys a competitor.
Give three benefits of internal growth?
Sensible and steady way to grow
Low debt involved
Little risk involved
Give two drawbacks of internal growth?
Growth is slow
Likely to be beaten to the punch by competitors
Give two benefits of external growth?
Growth is fast
It is a fast way to buy competitors customers
Give two drawbacks of external growth?
It is expensive to do
It is high risk and often involves getting into debt.
List five constraints on business growth?
Size of the market
Access to finance
Competition
Owner objectives
Regulations
