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3.2 business growth - Coggle Diagram
3.2 business growth
merges and takeover
merger- two businesses joining together to form one new company
takeovers are one business purchasing another
vertical integration- integration with different type of business in stage of supply chain
horizontal integration- same stage of supply chain eg two retailers two suppliers
reasons for staying small
reduced risk of overtrading|
easier product differentiation and usp
flexibility in responding to customer needs
growth
objectives of growth
develop economies of scale (spreading output)
market power and influence
get more market share % and brand awareness
problems with growth
diseconomies of scale - huge increase in fixed costs
internal communication can be difficult with size
overtrading- overspend with insufficient revenue
organic growth
growth through own business expansiom
mergers and takeovers are inorgamic growth
