External Growth Methods

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  • External Growth Methods
    • Diversification
      • Combine with an existing business operating in the market they want to enter
      • Gain from experience of those employed by business they combine with
    • Takeovers / Mergers
      • Reduce the amount of competition they face
      • With companies in the same market
    • Move into another country
      • Often combine with companies already operating and have an established infrastructure in the country
    • Economies of Scale & Scope
      • Benefits businesses in the same industry combining
    • Switch Production
      • Switch to countries where labour costs are low but expertise exists
      • Often in car industry
    • Develop new products & processes
      • If businesses lack certain technology / expertise might consider combining with businesses already with it

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