Expanding A Business Flashcards
What is a franchise
A franchise occurs when a ranchisor sells the rights to its products to a franchisee; this is usually in return for a fee and percentage of turnover
What is a franchisee
A franchisee buys a franchise usually in return for a fee and percentage of turnover
What is a franchisor
A franchisor sell a franchise usually in return for a fee and percentage of turnover
Internal growth (organic growth)
Occurs when a business gets bigger by selling more of its products
External growth (integration)
Occurs when a business gets bigger by joining or buying other businesses
What is Market capitalisation
Value of all the companys shares.
Market capitalisation= market price of a share x the number of shares
E-coomerce (or electronic commerce)
Is the act of buying or selling products using an electronic system such as the internet
What is outsourcing
Outsourcing occurs when a business uses another business to produce for it
What is a merger
A merger occurs when 2 or more businesses join together to form a new business
What is a takeover
A takeover occurs when one business buys comtrolmof another one
What are Economies of scale
Economies of scale occur when a business’s unit costs of production fall as its ouput rises and the business expands
Diseconomies of scale
Diseconomies of scale occur when the cost per unit increases as a business expands
