Methods of growth

Question 1

Organic growth

Answer 1

This is when a business grows on their own without any other organisations, this allows to increase market shares without losing control of the company

Question 2

Methods of Organic growth

Answer 2

Launching new products/services, opening new branches or expanding existing ones, introducing e-commerce, hiring more staff and increasing production capacity.

Question 3

Diversification

Answer 3

This is when a company launches different products across different markets like seeking both phones and fridges

Question 4

Horizontal intergration

Answer 4

When businesses from the same sector of industry become one this could be two apple farms merging together

Question 5

Pros+cons of horizontal integration

Answer 5

The new large business will dominate the market, business may increase prices as there is less competitors. This may brake the EU rules of competition, and quality and prices may go up and down respectively, which isn’t good for the customers.

Question 6

Forward vertical integration

Answer 6

This is when a business merges with a business in a later sector of industry, like an oil mining company taking over a oil refinery.

Question 7

backward vertical integration

Answer 7

this is when a business takes over another business in an earlier sector of industry, so for example an oil refinery buying an oil rig company

Question 8

lateral integration

Answer 8

this is when a business acquires/merges with a business in the same sector of industry but they don’t provide the exact same product like Greggs which is a bakery buying a wedding shop bakery, their customers aren’t looking for the same thing

Question 9

conglomerate integration

Answer 9

this is when a business joins with a different business from a different markets