Growth Flashcards
Delegate
Passing authority down the hierarchy
Diseconomies of scale
Factors that cause average costs to rise as output rises
Economies of scale
Factors that cause average costs to fall as output increases
Market dominance
A situation where a firm sells a product that achieves a very high market share. The firm can raise prices without losing too many customers
Organic growth
Comes from within a business
Inorganic growth
Externally via merger or takeover
Strategic fit
Buying another business that can provide a real boost to long term growth and profitability
Takeover
When one business buys majority ownership in another, thereby gaining full control
Annual general meeting
Yearly meeting at which shareholders have the opportunity to question the chairperson and vote on new directors for the board
Private equity
Investment groups that buy up businesses in the expectation that they’ll be able to sell them for profit
Synergy
This occurs when the whole is greater than the sum of the parts. It is often the reason for mergers or takeovers
M-commerce
Electronic transactions carried out on the move, such as ordering a delivery by smartphone
Average cost
Cost of producing one unit of output, it is calculated by dividing total cost by current output level
