Chapter 3 Flashcards
Entrepreneur
Someone who organizes, operates and takes the risk for a new business venture.
Business plan
The objectives and details of the operations, finance and owners of a new business.
Capital employed
The total value of capital used in a business.
Internal growth
The business expands its existing operations, e.g. a retailer opening more shops.
External growth
The business expands by merging with or taking over another business.
Takeover
A business buys out the owners of another business.
Merger
The owners of businesses agree to join their firms together to form one business.
Horizontal integration
The business integrates with another in the same industry at the same stage of production - such as two fashion shops.
Vertical integration
The business integrates with another in the same industry but at a different stage of production - towards suppliers is backward vertical integration and towards the market/customer is forward vertical integration.
Conglomerate integration
The business integrates with another but in a different industry (also known as diversification) - such as an insurance company merging with a food-processing business.
