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
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
3
Q
What is organic growth
A
Is achieved by increasing the firms sales, selling more to existing customers
4
Q
What is a merger or an acquisition?
A
Where two companies join together to form a new larger business
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
6
Q
What is a strategic alliance
A
Similar to a joint venture
Typically less involved and less permanent
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
