External Growth

When two businesses agree to combine resources on a project for a finite period of time and create a separate legal entity, what is this known as?

• An acquisition

• A strategic alliance

• A merger

• A joint venture

When one business buys out another business to become a single but large company, this is known as a merger.

• TRUE

• FALSE

A strategic alliance occurs when two or more firms agree to commit resources to achieve an agreed set of goals without creating a new legal business entity.

• TRUE

• FALSE

Which method of growth occurs with a combination of two previously separate companies agreeing to integrate as a new separate entity?

• Strategic alliances

• Mergers

• Joint Ventures

Losing some control over the running of a business is a disadvantage for a franchisor.

• TRUE

• FALSE

In a franchise arrangement, the original business that developed the business idea and sells the right to others to use it is known as a franchisor

• TRUE

• FALSE

A vertrical M&A is also known as vertical (a)