Business Growth

Why might a business want to grow?

• More Profit

• Give employees more time off

• To improve the business image

• To sell less products

Why might a business want to grow?

• To gain more competition

• To gain more customers

• To reduce the amount of stores

Which method of growth carries more risk?

• Internal/Organic

• External/Inorganic

Franchising is a method of ____________ growth

• Internal

• External

Internal/Organic growth is easier to manage and control than External/Inorganic.

• True

• False

Which of the following is NOT Internal/organic growth?

• Opening a new location

• Expanding through internet selling

• Merging with a similar company

• Offering franchises

A merger is...

• A method of Internal growth

• A friendly deal where two businesses join together

• A forced and sometimes hostile deal where one firm buys a share of the other business

A take-over is...

• A method of Internal growth

• A friendly deal where two businesses join together

• A forced and sometimes hostile deal where one firm buys a share of the other business

HORIZONTAL integration occurs when...

• firms in the same industry and at the same stage of the production process combine to form a larger business.

• when a firm expands by combining with an existing business in the same industry but at a different stage of the production process.

• Involves take over or merger with another firm in an unrelated industry.

Vertical integration occurs when...

• firms in the same industry and at the same stage of the production process combine to form a larger business.

• when a firm expands by combining with an existing business in the same industry but at a different stage of the production process.

• Involves take over or merger with another firm in an unrelated industry.