Methods of growth

Question 1

Internal/organic growth

Answer 1

When the business grows itself using retained profits and without the help of other businesses

Question 2

Merger

Answer 2

Two businesses agreeing to join forces and become the one organisation

Question 3

Takeover

Answer 3

When a business takes control of another business which is possibly struggling to survive or be profitable

Question 4

Horizontal integration

Answer 4

Firms producing the same type of product or providing the same type of service combine together

Question 5

Forwards vertical integration

Answer 5

When two businesses from different sectors of industry become one business

Question 6

Backwards vertical integration

Answer 6

When a business takes over a supplier who provides raw materials

Question 7

Lateral integration

Answer 7

When a business joins with another in the same sector but not a direct competitor

Question 8

Conglomerate integration

Answer 8

When businesses in different markets join together

Question 9

Outsourcing

Answer 9

When an organisation arranges for another organisation to carry out certain activities instead of doing it themselves

Question 10

De-merger

Answer 10

When an organisation splits into two seperate organisations