3.9.1 Assesing a change in scale (2)
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- Created on: 12-01-22 14:05
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- Methods of growth
- 3.9.1 Assesing a change in scale (2)
- Types of intergration
- Vertical
- Occurs when a business joins with another buisness at a different stage of the same production process.
- Congiomerate
- Occurs when one business joins together with another business in a different production process.
- Vertical
- Retrenchment occurs when a business reduces the scale of its operations.
- Impact of growth on the functional areas of the business
- Finance - Capital may be needed to finance the growth, cash flow problems may occur
- Human resources - Provide opportunitiesin the long-term, can place a burden on staff in the short-term
- Operations - Improve capacity utilistaion in short-term but may need to invest in more capital in the future
- Marketing - Require more investment
- Impact of retrenchment on the functional areas of the business
- Finance - High costs in short-term
- Human resources - Redundancies or redployment
- Marketing - More consistency
- Operations - Will be reduced, improving efficiency
- Types of intergration
- Takeover
- A business gains control over another business and gains ownership of it.
- Merger
- Owners of two or more businesses become owners of a new shared organisation.
- Venture
- Businesses share their information and resources on some projects, but each retaining their own identity.
- Franchise
- Occurs when one business sells the right to another business to use its name and sell its goods or service in return for a fee.
- 3.9.1 Assesing a change in scale (2)
- Horizontal
- Types of intergration
- Vertical
- Occurs when a business joins with another buisness at a different stage of the same production process.
- Congiomerate
- Occurs when one business joins together with another business in a different production process.
- Vertical
- Occurs when one business joins together with another business at the same stage of the same production process.
- Types of intergration
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