chapter 2 - ways to grow Flashcards
acquisition
a firm buys another firm
backward vertical integration
a business strategy in which a company buys a business before themselves in the supply chain
conglomerate integration
a merger of firms in different areas
forward vertical integration
involves acquiring a business further up the supply chain
horizontal integration
merging with someone on your supply chain level
inorganic growth
a firm expands through integration with other firms in takeovers or mergers
joint venture
2 firms collab or work together
merger
a combination of two things into a task or project
organic growth
internal growth e.g. retained profit
strategic alliance
two or more collabs
supply chain
a network between a company and its suppliers to produce and distribute a specific product to the final buyer
takeover
an expansion by buying more than half of the shares of another
5 methods of organic growth
- gain new customers
- increase output
- develop new products
- increase market share
- develop new markets
3 advantages of internal growth
- relatively low risk
- a business can maintain its values and cultures without interference
- increased production means the business can benefit from the EOS
4 disadvantages of organic growth
- relatively slow
- loss of first mover advantage
- may be a long period between investment and return on investment
- growth may be limited and us dependent on the reliability of sales forecast
