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Flashcards in unit 1 business growth Deck (14):
1

merger

2+ business agree to join to form one larger business. it is a quick way for a business to grow

2

takeover

1 business buys control of another business. for limited companies this means that they must buy 50% of shares. quick growth.

3

hostile takeover

when someone takes over the business without agreeing but has no control

4

horzontical growth

2 business that are the same type join together. E.g 2 chocolate companies.
gains more market

5

vertical growth

a business that joins with its suppliers backwards vertical or it supplies to forward vertical.
ensures that the suppliers will be on time

6

diverisifcation

a business merges with a business that it has no connection to.
spreads risks
lack of knowledge in the industry can cause problems

7

an example of takeover and horizontal growth

business that makes radios merging with a TV business

8

an example of vertical backwards merger

a business that assemble computers merging with a micro chip company

9

an example of a vertical forwards merger

two business agree to join together

10

two types of growth

organic- internal
inorganic external

11

internal growth

increasing sales of product and services
it is increasing its own size rather than takeover another business

12

examples of internal growth methods

increasing outputs of existing products
gaining new customers
develop new products
increasing market shares

13

external growth

merging or buying to taking over a another business

14

label the line of production

primary- secondary- tertiary- customers
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