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Growth
Internal/Organic Growth
Selling more products
External Growth/Integration
3 forms
Horizontal: same stage of same production process
Vertical: Different stage of same production process
Conglomerate: Different production process
Merger ­ two or more businesses join to form a new
business
Takeover ­ one business gains control of another
Selling franchises
Selling the rights to the business's name, logo and
operating methods to another business…read more

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Advantages Disadvantages
Economies of Scale Reduced employee motivation (don't feel
recognised)
Less risk of takeover Slower decision making
More power can increase distribution Less co-ordinated
More status improves employees Only works if there's demand for the
motivation product
Customers more likely to buy Poor communication: messages may
become lost or distorted…read more

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Type Advantages Disadvantages
Horizontal Higher output can generate However, they can all cause
economies of scale. diseconomies of scale and culture
Vertical Gain control of suppliers/ clashes between the different
distributors: improves quality + businesses.
reliability and reduces costs.
Conglomerate Spreads risks across many
markets…read more

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Advantages Disadvantages
·Quick method of expansion · Lose control to franchisees
·Franchisee provides most of finance · Quality problems in one franchise can
·Get percentage of profits (royalties) affect the reputation of the entire business.
·Franchisees are often motivated · Most of the profits go to the franchisees.
·All franchisees can contribute to national
marketing campaigns so you have more
money, hopefully making them more
successful.…read more

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Stakeholder Advantages of Disadvantages of How they may
Growth Growth react
Employee More chance of Less recognition as an Strike, Complain,
promotion and more individual, not as well- Lobby
job security informed Government
Shareholder Higher dividend Vote in AGM, sell
payments shares
Community Job opportunities, more Business may expand Complain to
services in area abroad business/media
Government Less unemployment Business may expand Impose laws or
benefit, more income abroad restrictions
tax
Suppliers Larger orders give them Business may demand Complain, lobby
chance to grow discounts - more power government…read more

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