Chapter-3: Enterprise, business growth and size Flashcards
Who is an entrepreneur?
The person who bears the risks and takes key decisions in a business.
What is a business plan?
A document containing the business objectives and details about the operations, finance and the owners of the new business.
What is the capital employed?
The total value of the capital used in a business.
What is a merger?
When the owners of two businesses come to an agreement to merge their businesses to make one business.
What is a horizontal merger/integration?
When a business merges with or takes over another business in the same industry at the same stage of production.
What is a vertical merger/integration?
When a business merges with or takes over another businesses in the same industry but at a different stage of production. It can be forward or backward.
What is backward vertical merger/integration?
This is when a business integrates with another at an earlier stage of production.
What is forward vertical merger/integration?
This is when a business integrates with another at a later stage of production.
What is a takeover?
This is when a business buys out the owners of another business.
What is the internal growth of a business?
When a business expands its existing operations.
What is the external growth of a business?
When a business takes over or merges with another.
What is conglomerate merger/integration?
When a businesses merges with or takes over a business at a completely industry. It can also be referred to as diversification.
