Types of Growth Flashcards
What is a merger ?
Two business form a new one
What are the benefits of mergers?
More capital, exchange skills, more employee choice, less likely for takeover, make more products, increased market share
Disadvantages of a merger
Redundancy, disputes, upsetting customers, clash of management
What is a takeover?
When one business buys the majority of another’s shares
What are the advantages of a takeover?
Quick, more profit, bigger market share, the new firm is an asset, establish bigger name
What are the disadvantages of a takeover?
Large risks, expansive, time consuming, potential loss of customers
What is a joint venture?
When a new business entity is formed
What are the advantages of a joint venture?
Sharing knowledge, benefits both parties, enhances sales revenue, new ideas
What are the disadvantages of a joint venture?
Disputes, may not work, customer opinion and harmful reputation
What is a strategic alliance?
An agreement between two or more parties to peruse a set of agreed objectives
