Growth Flashcards
1
Q
Why does a firm chooses to grow
A
The larger the firm👉🏾the more control👉🏾more profit
2
Q
How do firms grow
A
Internal and external growth
3
Q
What is internal growth
A
Growth generated through increasing sales which will require a firm to invest in captial
4
Q
What is external growth
A
Growth achieved through a merger or takeover. Where one firm joins another
5
Q
What are the main types of integration
A
Backward vertical
Horizontal
Conglomerate
Forward vertical
6
Q
Benefits of growth
A
Gain economies of scale
Increased market share
No competition
7
Q
Costs of growth
A
Possibility of diseconomies of scale
Job insecurity
No competition
8
Q
What happens when u increase productivity
A
Workers are more efficient
👉🏾lower average costs👉🏾lower prices for consumers
