Topic 2.1. Growing the business
Methods of business growth
Internal
External
Introducing new products
Entering new markets
Mergers
Takeovers
Types of business ownership
A business's ownership type can have an impact on its ability to raise finance in order to fund its growth.
Public Limited Companies (PLCs)
Ability to raise additional finance.
Limited liability
Seen as more prestigious and potentially more reliable
May be able to negotiate better prices with suppliers
Risk of hostile takeovers
Increased media attention
More complex accounting and reporting procedures
Less privacy in relation to financial performance
Multinational Companies
Wider target market
Ability to take advantage of cheaper labour and utilities abroad
Can spread risk between operations in different countries
Reputation as a market leader
Loss of focus on key markets
Cultural and language differences between different countries
Potential damage to reputation if found to be operating unethically
Uncertainty regarding profits based on exchange rates that change on a regular basis
Sources of finance
Internal
External
Retained profit
Selling assets
Loan capital
Share capital
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Changes in business aims and objectives
The impact of globalisation
Imports
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