Size of business

Takeover: when a company buys more than ____ of the shares of another company and becomes the controlling owner of it

• 60%

• 30%

• 40%

• 50%

"integration with a business in the same industry but a customer of the existing business" is the definition of?

• Horizontal integration

• Vertical backward integration

• Vertical forward integration

• Conglomerate integration

"having control supplies of materials to competitors" is an important advantage of ?

• Horizontal integration

• Vertical forward integration

• Conglomerate integration

• Vertical backward integration

Horizontal integration can leads to bad publicity or monopoly investigation. Why?

• consumers suspect of uncompetitive activity and react negatively

• lack of clear focus and direction because the business is spread across more than 1 industry

• business is now able to control the promotion and pricing of its own products

• combined business may exceeds certain market share limits

Conglomerate integration provides more job security because?

• its can secures a secure outlet of for the firm's products- may now exclude competitors's products

• risks are spread across more than one industry

• consumers may obtain improved quality and more innovative products

• they may be more varied career opportunities

Rapid growth won't lead to negative cash flow and an increase in long-term borrowing

• TRUE

• FALSE

what is the possible strategies to deal with managerial problems?

• decentralization

• when proposing takeover, offer shares in the new business rather than making cash offer to the shareholders

• adopt focused marketing strategies for each specific product

• all 3 are correct

what are some financial problems with rapid growth

• expansion can be expensive

• takeover can be expensive

• additional fixed capital and working capital will be required

• all 3 are correct

marketing problem for rapid growth

• all 3 are correct

• may not succeed if market strategies are not suitably adapted

• adopt focused marketing strategies for each specific product or each country

• existing management may be unable to cope with problems

name one possible way that help business if the original owner started to lose control due to rapid growth