unit 1 business growth Flashcards
merger
2+ business agree to join to form one larger business. it is a quick way for a business to grow
takeover
1 business buys control of another business. for limited companies this means that they must buy 50% of shares. quick growth.
hostile takeover
when someone takes over the business without agreeing but has no control
horzontical growth
2 business that are the same type join together. E.g 2 chocolate companies.
gains more market
vertical growth
a business that joins with its suppliers backwards vertical or it supplies to forward vertical.
ensures that the suppliers will be on time
diverisifcation
a business merges with a business that it has no connection to.
spreads risks
lack of knowledge in the industry can cause problems
an example of takeover and horizontal growth
business that makes radios merging with a TV business
an example of vertical backwards merger
a business that assemble computers merging with a micro chip company
an example of a vertical forwards merger
two business agree to join together
two types of growth
organic- internal
inorganic external
internal growth
increasing sales of product and services
it is increasing its own size rather than takeover another business
examples of internal growth methods
increasing outputs of existing products
gaining new customers
develop new products
increasing market shares
external growth
merging or buying to taking over a another business
label the line of production
primary- secondary- tertiary- customers
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