Reasons For Mergers And Joint Ventures

Question 1

What is organic growth

Answer 1

Means that business grows from within using its own resources

Question 2

What is inorganic growth

Answer 2

Occurs when a business gets bigger by joining with other firms

Question 3

What is a joint venture

Answer 3

Business work together for a one off project

Question 4

How can spreading risk in new countries benefit a business

Answer 4

Provides stability. Means down turn in one country won’t effect demand for products overall

Question 5

What’s the benefits of acquiring a national brand name

Answer 5

They already have an established image and loyal customers

For a business entering the market it is useful and rapid way of expanding market share

Question 6

How can a merger increase global competitiveness

Answer 6

Due to a merger average costs can be reduced by achieving economies of scale
Can make high profits from low costs which can be reinvested back into the business