3.9.1

Question 1

What’s the difference between a takeover and merger?

Answer 1

Merger is when two business form into 1 whereas takeover is when a business buys more than 50% of shares

Question 2

What is venture?

Answer 2

Are small businesses or projects that are set up by existing businesses to make a profit

Question 3

What is a joint venture?

Answer 3

Businesses share their resources but there is no change in ownership between the businesses.

Question 4

What is horizontal integration?

Answer 4

When a firm combines with another firm in the same industry at the same stage of production process.

Question 5

What is vertical integration?

Answer 5

Happens when a firm combines with another firm in the same industry but at different production process eg retailer taking over a manufacturer.

Question 6

4 reasons why a business might base its grow strategy externally?

Answer 6

-they want to diversify, gain experience with those employed by the business they combine with.
-reduce competition
-benefit from economies of scale
-technology