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Adv+Disadv of methods of growth - Coggle Diagram
Adv+Disadv of methods of growth
organic
Advantages
No loss of control as outsiders are not involved
Hiring more staff will bring new ideas
Disadvantages
Can be a slow method of growth
May be limited by the size of the market
Horizontal integration
Advantages
Removes a competitor from the market
Business gains a greater market
Disadvantages
Hostility and job losses may occur
Changes within the business could impact negatively on customer loyalty
Backward vertical integration
Advantages
Guarantees the quality of inputs and the supply of stock
Cuts out the middle man leading to increased profits
Disadvantages
Entering into new markets may affect core activities as resources and expertise need to be shared
Forward vertical integration
Advantages
Guarantees an outlet to sell products
Cuts out the middle man leading to increased profits
Disadvantages
Entering into new markets may affect core activities as resources and expertise need to be shared
lateral integration
Advantages
Spreads risk across different markets
Targets new markets increasing customer base
Business gains customers and assets from the acquired business
Disadvantages
Entering into new markets may affect core activities as resources and expertise need to be shared
May not have the knowledge required to successfully run the new business
conglomerate integration
Advantages
Business gains customers and assets from the acquired business
Targets new markets increasing customer base
Spreads risk across different markets
Disadvantages
May not have the knowledge required to successfully run the new business
Entering into new markets may affect core activities as resources and expertise need to be shared