Economies of Scale
Mention 3 ways in which you can measure the size of a Company:
- Amount of workforce.
- Profit (earnings).
- Market share
- Economies of scale.
Another way to call "Internal Growth"
"Organic Growth"
The expansion of an organisation with the participation of another organisation.
Definition of Merger:
It's a form of external growth that usually results in two firms combining to form a third entity. This new company then replaces the two that existed before the merger.
What is a business?
An organisation that combines its physical, financial and human resources to produce goods or provide services to customers to make profit
Economies of scale implies the increase of production and...
Decrease of Costs of Production.
Mention 3 examples of internal growth:
▪Price change
▪Effective promotion
▪Higher product quality
▪Better distribution networks
▪Offering preferential credit
▪Higher investment
▪Training
Mention 3 reasons to grow:
- Survival.
- To gain economies of scale.
- To increase future benefits.
- Market share gain.
Mention the main difference between an Acquisition and a Takeover:
Acquisition: the Board of directors/Owners accept the Purchase.
Takeover: an "aggressive" purchase, the Board of Directors don't agree with the purchase.
Define the private sector
Businesses that are owned by non governmental individuals that aim to make profit
Diseconomies of scale implies the increase of production and...
the increase of costs of production.
Define internal growth:
The expansion that is carried out by the organisation itself, without working with a partner.
Mention 2 advantages of external growth:
- Often faster than internal growth.
- Potential for economies of scale.
- a competitor may be eliminated (in cases such as a merger, acquisition or takeover).
- Can create synergies, increase employee talent pool, widen range of expertise.
Mention the difference between Joint Venture and Strategic Alliance
With a joint venture, two or more companies create a single legal entity in which each owns a share.
A strategic alliance, each company works together but no new legal entity is created.
Define Publicly held Companies
a coorporation whose ownership is distributed away to public shareholders through trading.
Mention 3 reasons for a Company to stay small, and explain 1:
- Avoid risk
- Maintain control:
- Small market size: due to the specialisation or type of market.
- Sustainability:
- Strong social networks:
Mention 2 strategies for growing internally:
- Increasing production and gaining market share.
- Developing new products.
- Finding new markets.
Mention 2 disadvantages of external growth:
- Often riskier than internal growth.
- Might be hard to realise cost reductions if the firms are too different.
- Possibility of culture clash between organisations.
- Proprietary information and technology could be lost (in joint ventures or strategic alliances).
Explain Franchise
A franchise is a form of business where an individual or business buys a license to trade using another companies products, names, logos, brands, and trade mark
differentiate between stakeholders and shareholders.
A shareholder owns shares in a company, while a stakeholder is anyone affected by the company’s actions
Mentioned 3 advantages of large organisations and explain them briefly but accurately:
- Potential for economies of scale
- More resources for marketing campaigns
- Prestige for the employees.
- More able to hire specialist to comply with regulations.
- Resources to drive out the competition.
Mention 2 advantages and 2 disadvantages of internal growth:
ADVANTAGES:
-Owners keep control.
- Less expensive
- Less risk.
- Strong internal management
DISADVANTAGES:
- More employees means more salaries (cash flow problems).
- Slow growth.
- May have limited resources
What is globalization?
- The increasing interconnectedness of countries across the world in terms of communication, culture, trade, and the movement of people.
- The integration and interdependence of the world’s economies.
Mention 2 advantages and 2 disadvantages of a Franchisor
advantages: Rapid Growth and International Presence
disadvantages: Huge risk and Difficult to control
Internal stakeholders are people inside the business (like employees, managers, and owners).
External stakeholders are people outside the business (like customers, suppliers, and the government).