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Week 8 - Coggle Diagram
Week 8
Mergers and takeover
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Vertical integration - where a business buys another business at a DIFFERENT part of the supply chain (eg a retailer buying a supplier)
Horizontal integration - where as business buys a business at the same stage of the supply chain (eg a retailer buying a retailer)
Business growth
Leads to the following positives:
economies of scale
Branding and market share
Increased profitability (likely due to economies of scale)
However, can also lead to:
Diseconomies of scale
Lack of effective communication
Over trading (overspending)
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Global ethics
Businesses need to ensure that employees are being paid, and to a liveable wage too. Failure to do so can lead to a poor reputation and demotivated employees
Businesses need to consider their environmental impact due to their operations. This can include: waste dumping, noise and sound pollution and harming the local environment)
Businesses need to think about their supply chain to ensure they are being ethical, eg. Not exploiting child labour or unfair wages
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