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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