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Business growth - Coggle Diagram
Business growth
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Organic growth
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This is done through opening new stores, branches, functions or plants
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External growth
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Integration
Forward vertical integration is when a firm takes over another firm ahead of it in the process e.g a car manufacturer takes over a car dealer
Backwards is when a firm takes over another firm behind it in the process e.g a car manufacturer mergers with a tyre supplier
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Conglomerate integration is when two unrelated firms integrate e.g a car manufacturer merges with a book store
Horizontal integration happens when two firms at the same stage within a process integrate e.g 2 car manufacturers
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Horizontal integration
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Disadvantages
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Diseconomies of scale with communication and coordination problems between the business and that taken over
Conglomerate integration
Advantages
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Allows for cross selling of products in different markets due to brand recognition and access to customers
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Disadvantages
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Diseconomies of scale with communication and coordination problems between the business and that taken over