A2 Business growth

Business expansion achieved by means of merging or taking over another business

• Internal, organic growth

• External growth

An agreement by shareholders & managers of two businesses to bring both firms together to create a new business with a common board of directors.

• Merger

• Takeover/acquisition

When one company buys more than 50% of the shares of another company and becomes the controlling owner

• Merger

• Takeover/Acquisition

DBIS merging with DC would be an example of

• Horizontal integration

• Vertical forwards integration

• Vertical backwards integration

• Conglomerate integration

Starbucks merging with a coffee plantation would be an example of

• Horizontal integration

• Vertical forwards integration

• Vertical backwards integration

• Conglomerate integration

A clothing manufacture merging with Zara would be an example of

• Horizontal integration

• Vertical forwards integration

• Vertical backwards integration

• Conglomerate integration

McDonalds merging with Nike would be an example of

• Horizontal integration

• Vertical forwards integration

• Vertical backwards integration

• Conglomerate integration

Which is not a benefit of horizontal integration for the business?

• Eliminates competition

• Potential economies of scale

• Increased power over suppliers

• May lead to an investigation if the combined business exceeds market share limits

Which is not a benefit of Vertical forwards integration?

• Business can now control price and promotion

• secures an outlet for the firm's products

• Competitor's products could be excluded from the outlet

• May lack experience in this sector of the industry

Which is not a disadvantage of conglomerate integration? choose two

• Diversifies business away from original market

• Can help spread risk

• Could be a lack of focus and direction now that the business is spread across more than one sector

• May lack experience in this industry