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Business Expansion - Coggle Diagram
Business Expansion
Why Expand
economies of scle (defensive)
elimination of competition (offensive)
diversification (defensive)
entering new markets (offensive)
entreprenurial drive to succeed (psychological)
Increasing Sales (organic) (Type)
release new products, exporting
usually slow
increase what & where it sells,
from within
Franchising (organic) (Type)
economies of scale
Disadvantages:
motivation
less control
fast expansion
reputational risk
low capital investment
cost/time spent training
Benefits:
supervision
Merger (inorganic) (Type)
new markets
Risks:
allows for rapid expansion
industrial relations issues
diversification
clash of cultures
Benefits:
Business Alliance/ Joint Venture/ Strategic Alliance (inorganic) (Type)
reduces risk
easier to terminate
cost-effective method
resources shared
Advantages:
Takeover/Acquisition (inorganic) (Type)
eliminate competition
Disadvantages:
access to new markets
capital required
economies of scale
hostility
Benefits:
risk of failure