Growth Flashcards
What is the difference between a takeover and a merger?
A merger is a mutual decision of 2 businesses to become one entity and a takeover is a bigger business buying a smaller business. This doesn’t have to be a mutual decision
What else might a takeover be referred to as?
merger or acquisition
Identify three benefits of merging with or taking over another business
-greater financial strength
-to grow business
-increased market share
What is meant by ‘horizontal integration’?
Horizontal integration is an expansion strategy that involves the acquisition of another company in the same business line
Explain, with an example, the meaning of ‘backwards vertical integration’
acquiring a business operating earlier in the supply chain – e.g. a retailer buys a wholesaler, a brewer buys a hop farm. Another good example was Apple Inc. buying a chip supplier Dialog in 2018.
Identify one disadvantage of ‘forwards vertical integration’.
Due to a lack of competition, product quality and efficiency may suffer
What is meant by diversification?
expanding a company’s operations into new or unrelated products, services, markets, or industries
What else might diversification be referred to as?
Product differentiation
Identify two ways that a business might organically grow.
-offer promotion to new customers
-expanding product range
State what is meant by integration.
the process of combining two or more things to create a whole
Identify one way that Aldi is organically growing
Aldi is expanding its food selection
