What is business growth?
When a business expands its operations to increase sales, output, or profit.
Give three reasons why a business might want to grow.
Increase market share, increase profitability, reduce risk.
What is organic growth?
Growth from within the business, without merging or taking over another firm.
Give two methods of organic growth
Launching new products and opening new branches.
What is external (inorganic) growth?
Growth through mergers, takeovers, or joint ventures.
What is a merger?
When two businesses combine to form a new company.
What is a takeover?
When one business acquires control of another business.
What is a joint venture?
When two or more firms work together on a specific project.
what is franchising?
when a business allows another firm to trade using its name
what is horizontal integration?
when firms at the same stage of production merge.
what is backwards vertical integration?
when a firms mergers with their supplier (previous stage of production)
what is forwards vertical integration?
when a firm merges with another business further down the supply chain
what is conglomerate integration?
when a business expands into a completely different market
what is economises of scale?
when average cost decrease as input increases
two types of economies of scale?
purchasing economies, managerial economies
give one cause of diseconomies of scale
poor communication in large industries
what is synergy?
when two companies combined are worth more together than separately
what is over trading?
when a business takes on more orders than it can handle
what is retrenchment?
when a business reduces costs due to economic difficulties
What pressure force businessses to adopt digital technology
competition, customer needs, productivity
E-commerce + advantages
- buying and selling services / goods online
+ 24:7 market access
+ low start-up costs
Automation
use of robots/machinery to carry out tasks
automation advantages
low labour costs, higher productivity
Big data
large volumes of data collected from many sources
