UB T4 Methods Of Growth Flashcards Preview

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Flashcards in UB T4 Methods Of Growth Deck (15)
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1

Methods of growth
Internal/Organic growth

Growing without getting involved with any other businesses.

Launching new products/services
Opening/expanding branches
E-commerce
Hiring more staff
Increasing product capacity

2

Methods of growth
Diversification

When a business launches products across different markets

E.g. Samsung sells phones & washing machines

3

Methods of growth
Horizontal integration

When two businesses from the SAME sector of industry become one.

4

Methods of growth
Forward/backward vertical integration

Supplier
⬆️ Backward integration
Business
⬇️ Forward integration
Customer

5

Methods of growth
Lateral integration

When businesses merge from the SAME industry but provide DIFFERENT products.

E.g. Greggs and a wedding cake shop. Both food, different markets.

6

Methods of growth
Conglomerate integration

When businesses in DIFFERENT markets merge.

7

Ways to achieve growth
Takeovers and mergers

A take over is when one business buys another.

A merger is when two businesses agree to join forces and become one organisation.

8

Ways to achieve growth
Others

Franchising
Becoming a multinational
Internal growth

9

Ways of funding growth
Retained profits

These are profits made by a business that aren’t given to shareholders.

10

Ways of funding growth
Divestment

Selling of a part of the business.

11

Ways of funding growth
Deintegration

When a business sells of the supply chain that it owns.
Undoing vertical integration.

12

Ways of funding growth
Asset stripping

When a business takes over another with intent to sell off its assets I.e. factories & retail spaces.

13

Ways of funding growth
De-merger

When a single business splits into two or more separate components.

14

Ways of funding growth
Management buy-out/buy-in

Buy-out is when the management of a business buy the company they work for.

Buy-in is when the management of another business takes over the business.

15

Ways of funding growth
Outsourcing

When an organisation arranges for another organisation to carry out certain tasks for them.