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Business Studies-Unit 2

Chapter 6- The business organisation

Organic Growth- (or internal growth)- occurs when a business sells more of its

External growth- (or integration)- occurs when a business joins together with
another business.

A merger- Occurs when two or more businesses join together with another

A takeover…

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Conglomerate integration- Can spread risks as a firm is operating in more
than one market. This means a fall in demand in one market may be
offset by an increase in demand in another.

Disadvantages of integration:

Diseconomies of scale- are the problems involved with controlling,
communicating and motivating staff…

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Employees may have more job security and receive greater rewards if
the business is growing and doing well. They might be proud to work for
a successful business and want to stay for longer. There may be greater
opportunities for promotion and new challenges as the business grows.
Suppliers may…

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Strike- A strike is when employees stop working and bring production to
a halt. Strikes may occur if employees feel they are badly treated of
Complain- Employees, suppliers, the community or the government
could complain to the business. If they argue well enough the
stakeholders may succeed in getting…

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Public limited companies are usually thought of as having more status
than private companies. This can impress customers.
Investors may be willing to buy shares because they should be able to
sells them later on relatively easily. There are usually many shares in
public limited companies and these are traded…

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Market share ­ As part of the growth objective, a business may set itself the
target of becoming the dominant firm in the industry.i.e. Having the highest
market share.

Market Leader- Is the biggest firm in a market, i.e. it has the largest market

Innovation- Typically a business will…

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Ethical and Environmental Considerations

Customers, employees and investors are interested in all the different aspects
of business activities. We do not just want to know what a business offers and
at what price. We want to know how the product was made, what was used in
the production process, where…

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The possible impact on revenues. Does the new location help the
business to attract customers?
The availability of resources. Does the new location offer staff with the
necessary skills and if so what will they cost? The availability of skilled
labour is one reason why many UK manufactures have moved…

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Import- is a product brought from abroad

Quota- is a limit on the number of foreign goods imported into a country.

Tariff- is a tax on foreign goods imported into a country.


A product portfolio- is the collection of products that a firm

A dog product- Has a…

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Question mark

Also called `oil rigs' or `problem children', these products could turn
out to be very successful and the market is attractive because it is
growing so fast. However the moment the business cannot be sure
whether or not the product will succeed the business needs to
spend money…




Excellent notes covering some of the main areas. Students will need to make it more interactive by turning it into mind maps, posters etc

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