1.5 Flashcards
Types of Business Growth (11 cards)
What is internal growth?
growth carried out by the company itself without working with a partner
What are benefits of internal growth?
- less expensive than external growth
- less risky than external growth
- more control over the business than external growth
- can respect the company’s values more than external growth
What are limitations of internal growth?
slower than external growth
can cause cash flow problems
limited by its own financial resources
What are strategies for growing internally?
gaining market share, product diversification, opening new stores, investing in new technology, expanding to new markets
What is external growth?
when a business grows by involving itself with another organisation
What are mergers?
when two businesses combine into a single company; changes their name
What are acquistions?
one company purchases another company with permission of the board of directors of that other company
What are takeovers?
one company purchases another company without permission of the board of directors or the company itself
What is a joint venture?
two businesses join together to form a seperate business for a short period of time as a project
What are strategic alliances?
two ore more businesses work together to achieve a common objective without creating a new business
What is franchising?
The franchisor is a company with a successful business model that wishes to expand by parterning with franchisees that open and run outlets for these franchisors
