Chapter 11 Flashcards
(8 cards)
1
Q
organic growth?
A
this is internal development, when. company grows the organic way without any access to immediate capital.
2
Q
advantages of organic growth?
A
-spreads cost over time
-easier to control
-funding may be easier to access
3
Q
disadvantages of organic growth?
A
-slower
-no access to existing brands
-high failure risks in unfamiliar markets
4
Q
acquisition and mergers?
A
Acquistions- when a company buys controlling power over another
mergers - when two companies combine forces
5
Q
advantage?
A
-faster growth
-Economies of scale
-Reduces competition
6
Q
disadvantages?
A
cultural misfits
-overpaying
-loss of key staff
7
Q
Porters 3 tests?
A
better-off test - do synergies exists
cost of entry test - cheaper alternatives
attractiveness test - is the market good?
8
Q
A
