Types Of Growth/ Intergration Flashcards
Define organic growth with an example
Growth that comes from internal sources (expanding the product range)
Name 3 positives of organic growth
-Less risky
-can maintain the firms work culture
-employees have more chance for promotion
Name 2 negatives of organic growth
- its slower
- growth may be limited
Define inorganic growth
Growth of a firm from external sources such as mergers and acquisitions
Name 3 positives of inorganic growth
- gain market share
-gain more customers - gain EOS
Name 5 negatives of inorganic growth
- risky
- can lead to culture clashes
- expensive
- have to reorganise the workforce
- takes time with the CMA
Define horizontal intergration
The merger of firms at the same point in the supply chain
Define vertical integration
The merger of firms along the supply chain
Define conglomerate integration
The merger of firms in completely different industries
Give 6 positives of horizontal integration
- decrease competition
- ^ market share
- revenue and growth
- increase customer base
- gain EOS
- Previous knowledge of the industry
Give 3 negatives of horizontal integration
- leadership an culture clashes
- communication
- legal and regulatory issues (CMA)
Give 4 positives of vertical integration
- the firm can control the supply chain
- decrease costs
- ^ product or service quality
- can capture the value added
Give 2 negatives of vertical integration
- ^ operational costs
- high upfront starting costs of capital
Give 3 positives of conglomerate integration
- it can diversify a firms portfolio
- ^ customer base
- ^ efficiency
Give 1 negative of conglomerate integration
There will be a lack of expertise in the different industry
