growth micro

Question 1

organic growth

Answer 1

organic growth is when a firm expands their business via
1. opening more stores
2. new products
3. better production

Question 1

external growth

Answer 1

is when a firm expands their business by aquiring other businesses

Question 2

horizontal integration is a type of external growth

Answer 2

when a firm mergers with its competitors .
i.e sainsbury and asda

Question 3

backward vertical integration

Answer 3

when a firm acquires businesses in the supply chain .
i.e apple buying Vrvana (specialises in VR headsets)

Question 4

forward vertical integration

Answer 4

involves a business moving closer towards the customer. This would involve buying a business involved in the distribution directly to customers.

Question 5

Conglomerate integration

Answer 5

Conglomerate integration is a merger between two completely unrelated businesses
i.e. apple buying tesco

Question 6

advantages of external expansion

Answer 6

• rapid expansion
• diversify (spread) risk
• reduce competition

Question 7

disadvantages of external expansion

Answer 7

• complicated
• tension
• lose of jobs
• demotivated employee due to diff management style