ch - 3 Business growth

A garage agrees to merge with another garage.

• Horizontal merger

• Vertical Forward merger

• Vertical backward merger

• Horizontal takeover

A bicycle retailer expands by buying a bicycle shop in another town.

• Horizontal takeover

• Vertical Forward merger

• Vertical backward merger

• Horizontal merger

A fruit juice business buys a fruit farm.

• Horizontal takeover

• Vertical Forward merger

• Vertical backward merger

• Horizontal merger

A business making electrical goods agrees to join with a business with retail shops specialising in electrical goods

• Horizontal takeover

• Vertical Forward merger

• Vertical backward merger

• Horizontal merger

A mining company takes over a company supplying mining equipment.

• Horizontal takeover

• Vertical Forward merger

• Vertical backward merger

• Horizontal merger

A construction company buys a holiday company.

• Horizontal takeover

• Vertical merger

• Conglomerate merger

• Horizontal merger

Explain the likely reason for the expansion of a garage agrees to merge with another garage.

Answer explanation

The likely reason for the expansion of a garage agreeing to merge with another garage could be to increase market share, pool resources, or enhance services offered.

Explain the likely reason for the expansion of a fruit juice business buys a fruit farm.

Answer explanation

The likely reason for the expansion of a fruit juice business buying a fruit farm is to ensure a stable and cost-effective supply of fresh fruits for their juice production, thereby controlling quality and reducing dependency on external suppliers.

Explain the likely reason why a construction company buys a holiday company.

Answer explanation

A construction company may buy a holiday company to diversify its business portfolio, expand revenue streams, or diversify to maximise profits