Growth Flashcards
Franchise?
Sell the rights to another person, so they can sell your products.
3 pros of franchising.
Quick growth.
Receive money from rights.
Franchisor stays motivated, keeps most profits.
3cons of franchising.
Loose some control.
May damage reputation.
Profit goes to franchisor.
Economies of scale.
The cost per unit falls as the business grows.
Two types of growth and meaning.
Internal- increasing profits.
External-takeovers or merging.
Takeover?
A business buys enough shares and therefore takes control.
Horizontal mergers?
Same industry & same production stage.
Vertical mergers?
Same industry, different production stage.
Technology of scale?
Makes the product less valuable, because its less rare.
Unit cost formula?
Total cost~
Output
Diseconomies of scale?
The cost per unit increases, so does the output.
2 pros of e-commerce?
Allows smaller businesses to compete.
Opens international markers.
2 cons of e-commerce?
Competition all around the world.
Staff reduction.
Organic/internal growth
Increasing products- building new shops ect
External/integration growth
Takeovers and merging
