Business Growth Flashcards
(16 cards)
how can a business grow organically
increasing output, gaining new customers, developing new products, or increasing market share
how can a business increase output
- using resources more efficiently (training workers)
- using up spare capacity (unused factory space)
- increasing the capacity (building/opening new buildings)
how can a business gain new customers
- reducing prices
- opening new shops in different locations
- better marketing (bigger advertising campaign)
how can a business develop new products
- researching and developing
- copying the ideas of other businesses
- buying ideas from other businesses
how can a business increase market share
- increasing sales
- taking over a business
how can a business grow externally
merger, takeover, horizontal growth, diversification, backwards vertical growth, forward vertical growth
what is a merger
when two or more businesses join together to become one business
what is a takeover
when a business takes over another business such as buying more than 50% of the shares in it
what is horizontal growth
when both businesses merging or during a takeover are at a similar stage of production
what is diversification
when a business merges with, or takes over a business in a different industry
what is backwards vertical growth
when a business merges with, or takes over a business at an earlier stage of production
what is forwards vertical growth
when a business merges with, or takes over a business at a later stage of production
what is a benefit of horizontal growth
an increase in production and capacity could be decreased, which reduces costs
what is a benefit of diversification
risk is spread as success doesn’t rely only on one industry’s sales
what is a benefit of backwards vertical growth
guarantees a supply of materials to make the goods
what is a benefit of forwards vertical growth
guaranteed somewhere that will sell what is produced to customers
