business growth Flashcards
(19 cards)
impact and type of business growth 1
internal (organic) growth:
new products developed through innovation or r&d
new markets- reached by:
-changing the marketing mix
-using technology (selling online)
-expanding overseas-entering international markets
slower than external; but less risky and more controlled
impact and type of business growth 2
inorganic growth (external):
merger- two firms agree to join together
takeover- one business buys another
digital platform examples
e commerce sites like amazon
socia media like insta or tiktok (marketing + customer engagement)
payment platforms- paypal, apple pay
marketplaces- etsy, ebay
delivery apps- ubereats or deliveroo
why do businesses use Digital platforms
reach more customers
lower costs (no need for physical storefront)
market product directl to target audience
track data about sales, customer and performance
disadvantage of digital platforms
technical difficulties
payment problems reduce customer trust
cybersecurity risk- vulnerable to hacking and data breaches, legal consequence
negative reviews- poor reputations
high competition
setup+maintenance costs
staff training
why can takeovers be hostile
business taken may not wanna be bought
loss of control
culture clashes - diff ways o working
job losses through potential restructuring
stakeholder conflict
explain how hostile takeover works
buying business wanna take over another company
company management or boards like nah
so business goes directly to shareholders and offers to by their shares - tempting them
if enough shareholders agree and sell shares, business can gain control even if management don’t agree
advantages of external growth
quicker expansion
increase market share
access new technology or expertise
disadvantages of external growth
culture clashes
redundancies
expensive
business ownership for growth
public limited company plc
owned by shareholders
can sell shares on the stock market
however must publish financial accounts
can raise large amounts of finance via share capital
learn the funky words that aren’t on spec eg stock market flotation:
when a private lc (ltd)noffers shares to the public for the first time (traded freely on the stock exchange) , becoming public lc to raise a large sum of money for business
made redundant
people whose job ended because there was no more work available or no longer needed for their role
how to become unemployed ……..
made redundant
dismissed
school, college or university leaver
what does it mean to be dismissed
people whose last job ended as they broke their contract of employment, eg by engaging in misconduct
internal sources of finance examples and used wen…
the business wants to avoid debt or interest
retained profit- profit business has saved up over time
selling assets- selling things the business owns (vehicles, machinery)
limitation of internal source of finance
can run out or reduce capacity
external sources of finance examples and are used when..
a business needs a large amount of money for expansion
loan capital- borrowing money from bank,paid back with interest
share capital- selling shares to raise money
stock market flotation- selling shares to public on stock market (so plc only duh)
a growing business would use specifically which sources of finance ( state whether the ones you pick are internal or external hahahahahahahaha
retained profit (if its profitable)- internal
loans (to expand)- external
share capital (like investment from family or private investors) - external
an established business could use which source of finance specifically then specify whether internal or external muahahahhhhahaha
retained profit (internal)
sell assets no longer needs (internal)
issue new shares (external)
bank loans for major projects (external)
