methods of growth

means businesses deciding to grow on their own without getting involved with other organisations.

• launching new products/services - businesses can meet the needs of different market segments, especially if they diversify

• opening new branches or expanding existing branches - a business can reach new markets by opening up in new locations

• introducing e-commerce - by selling online a business can trade 24/7 to a global market

• hiring more staff - introducing more staff will improve the businesses ability to make sales, make better decisions and develop more products

• increasing production capacity - businesses can invest in new technology to make more prodcuts themselves

occurs when two businesses from the same sector of infustry become one business

ADVANTAGES

• the new larger business can dominate the market as competition will be vastly reduced
• the new business can benefit from economies of scale, e.g., buying in bulk to reduce prices
• due to reduced competiton, the new larger business can raise prices, increasing profits

DISADVANTAGES

• the merger/takeover may breach EU competition rules
• quality may suffer due to lack of competition
• customers may have to pay higher prices for the same goods

occurs when two business from different sectors of industry become one business

ADVANTAGES

• the business can control supply of its p;roducts and could decide not to supply to competition

• can increase profits by "cutting out the middle man" and adding value itself

DISADVANTAGES

• company may be incapable of managing new ectivities efficiently, meaning higher costs
• focusing on new actvities can adversely affect core activities
• monopolising markets may have lgal repercussions

when a business takes over or merges with an earlier sector of industry

ADVANTAGES

• guaranteed and timely supply of inventory
• no need to pay a supplier its marked-up prices so inventory is cheaper
• quality of supplies can be strictly controlled

DISADVANTAGES

• company may be incapable of managing new activities efficiently, meaning higher costs
• focusing on new activities can adversely affect core activities
• monopolising markets may have legal repercussions

when a business acquires or merges with a business that is in the same industry but does not provide the exact same product

ADVANTAGES

• the business can tgarget new markets and therefore increase sales
• new products can complement existing ones

DISADVANTAGES

• the lack of knowledge in a slightly different market may affect the performance of the products
• it may adversely affect core activities

occurs when businesses in different markets join together

ADVANATGES

• the business can spread risk. If one market fails the losses cn be compensated for profits in another
• it can overcome seasonal fluctutations in their markets and have more consistent year round sales
• the business is larger and therefore more financially secure
• the buyer acquires the assets of the other company
• the business gains the customers and sales of the acquired business

DISADVANTAGES

• one business may take on another in a market they know nothing abput and this may cause the new business to fail
• having too many products across different markets can cause the company to lose focus on core activities impacting on other products
• the business may become too large and inefficient to manage