expanding a business Flashcards
unit costs
total costs ÷ output
Economies of scale
Unit costs falling as output increases
Diseconomies of scale
Unit costs increasing as output increases
Franchising
A business selling the right to another business to use it’s name and sell its products
E-commerce
Selling goods and services using electronic devices e.g a website
Outsourcing
Asking another business to manufacture some of your products for you
Merger
Two businesses joining together to make one business
Takeover
One business buying another business
internal growth
- franchising
- opening new stores
- ecommerce
- outsourcing
external growth
- forward vertical
- backward vertical
- horizontal
- diversification
backward vertical integration
one business joins with another business who can supply their goods
forward vertical integration
one business joins with another business that can distribute their goods
horizontal integration
when a business joins with another business at the same stage of the production line (could be a competitor)
diversification
when a business joins with another in a different production process
