Size, growth, and external growth Flashcards

1
Q

What factors affect the size of a business

A

Market size
Nature of product
Personal preference
Ability to access resources for expansion

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2
Q

Why might a business want to grow?

A
  • greater challenge
  • owners want a higher return on investment
  • diversification into new markets
  • can fight threats easier
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3
Q

What is organic growth

A

Is achieved by increasing the firms sales, selling more to existing customers

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4
Q

What is a merger or an acquisition?

A

Where two companies join together to form a new larger business

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5
Q

What is a joint venture?

A

Formal business arrangement between two or more businesses who commit to work together on a particular project

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6
Q

What is a strategic alliance

A

Similar to a joint venture

Typically less involved and less permanent

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7
Q

Are joint ventures and strategic alliances beneficial for a businesses stakeholders?

A
  • could fail
  • one could be dominated by the other
  • terms of agreement need to be clear
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