Business Expansion Flashcards
What is Internal Growth/Organic Growth?
When a business gets bigger by selling more of its products
What is External Growth/Integration?
When i business gets bigger by joining or buying other businesses
How does a Franchise occur?
When a Franchisee buys a franchise in return for a Fee and Percent of Turnover
What is a Franchisee?
Person that buys Franchise
What is a Franchisor?
Person that sells a Franchise
Advantages of selling a Franchise
Can grow quickly
Franchisee provides some finance
Franchisees have more motivation
Disadvantages of selling a franchise
Loses some control
One franchise can affect whole brand
Have to share profits
Advantages of buying a Franchise
Estabished Brand
Access to training and supplies
Share marketing costs
Can learn from other Franchisees
Disadvantages of buying a franchise
Have to share profits
Have to work in Franchisor’s guidelines
Have to contribute to group marketing
Sales suffer if brand reputation goes down
What is ‘E-commerce’?
Buying or selling a product online
What is ‘Outsourcing’?
When a business uses another business to produce for it
What are some ways internal growth can occur?
Franchising
Opening new stores
E-commerce
Outsourcing
What are some ways external growth can occur?
Merger
Takeover
What is a ‘merger’?
When two or more businesses join together to make a new one
What is a ‘Takeover’?
When a business buys control of another one
