4TOBM-MDFL12-Growth and Evolution II

Expansion of a business by opening new branches, stores or factories (also known as organic growth). An example of internal growth would be a retail business opening more stores in towns and cities where it had none before.

• External growth

• Internal growth

Growth achieved through the merger or acquisition of another company, either from the same industry or from a different one.

• External growth

• Internal growth

Integration with a company in the same industry and in the same production stage.

• Cluster diversification or Cluster integration

• Backward vertical integration

• Forward vertical integration

• Horizontal integration

Integration with a company in the same industry, but a customer of the existing company. (Example a distributor)

• Cluster diversification or Cluster integration

• Backward vertical integration

• Forward vertical integration

• Horizontal integration

Integration with a company in the same industry but with a supplier of the existing company.

• Cluster diversification or Cluster integration

• Backward vertical integration

• Forward vertical integration

• Horizontal integration

Merger or acquisition of a company in a different industry.

• Cluster diversification or Cluster integration

• Backward vertical integration

• Forward vertical integration

• Horizontal integration

Two or more companies agree to work closely together on a particular project and create a business division to do so.

• Joint venture

• Strategic alliance

• Franchise

Agreements between companies in which each agrees to commit resources to achieve a set of agreed objectives.

• Joint venture

• Strategic alliance

• Franchise

A company using the name, logo and business systems of an existing successful company.

• Joint venture

• Strategic alliance

• Franchise

An agreement between the shareholders and managers of two businesses to unite both firms under a common board of directors with shareholders in both businesses holding shares in the newly merged business.

• Acquisition

• Merger