paper 2 - building a business

Question 1

what is internal growth

Answer 1

organic, growth inside the business

Question 2

what is external growth

Answer 2

inorganic, growth from outside business sources

Question 3

how to grow internally

Answer 3

new products (innovation, research and development), new markets (changing marketing mix, taking advantage of technology and/or expanding overseas)

Question 4

how to grow externally

Answer 4

merger (two business join agreement to join together), takeover (one business buys out another business)

Question 5

disadvantage of internal growth

Answer 5

takes time

Question 5

advantage of internal growth

Answer 5

slow, low risk, no interest (on internal sources of finance)
control rate of growth, maintain company cultures and ethics

Question 6

advantage of external growth

Answer 6

achieved quickly, expertise of both businesses to be shared, business has access to both customers - reduced competition

Question 7

disadvantage of external growth

Answer 7

regulators (can put stop to merge/takeover if it gives an unfair advantage in the market), expensive (initial costs of takeover), different corporate culture