BUSINESS TYPES
This type of business is owned and run by one individual.
What is a sole trader/sole proprietor?
Growth using a firm's own resources is called this.
What is organic growth?
This type of merger occurs between firms in the same industry and stage of production.
What is horizontal integration?
This objective focuses on earning the highest possible profit.
What is profit maximization?
This type of organization is owned and controlled by the government.
What is a state-owned enterprise?
This occurs when one firm purchases another business.
What is a takeover/acquisition?
Buying a supplier is known as this type of integration.
What is backward vertical integration?
SMEs are businesses with fewer than this number of employees under the EU definition.
What is 250 employees?
This business structure gives shareholders limited liability.
What is a limited company?
This term describes when two firms combine to form one company.
What is a merger?
Opening company-owned retail stores is an example of this type of integration.
What is forward vertical integration?
This occurs when a company splits into separate independent businesses.
What is a demerger?
In this business structure, members usually have one vote each.
What is a cooperative?
This type of growth is also known as external growth.
What is inorganic growth?
This type of merger occurs between firms in completely different industries.
What is conglomerate integration?
This term describes falling average costs as firms increase output.
What are economies of scale?
This business arrangement occurs when two or more firms work together on a specific project.
What is a joint venture?
This is one major advantage of organic growth compared to mergers.
What is lower risk/maintaining control?
Governments may block mergers because they fear this market condition.
What is monopoly power/reduced competition?
This objective occurs when firms aim for a reasonable level of profit instead of maximum profit.
What is profit satisficing?