integration and franchises
- Created by: Jessica Flory
- Created on: 08-03-12 20:19
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Growing as a business
internal growth: business selling more of its own product
external growth: by joining with another business
selling franchises: involves selling the rights to the businesses name and products to another business.
external growth
- also called integration
- when two or more firms join together and create a joint business.
- in a merger, the shareholders of each individual firm become shareholders of the new bigger business.
- Takeover or aquisition occurs when one firm takes control of another and buys it up.
Types of intergration
Horizontal integration
- when one firm joins with another firm at the same stage of the same production process.
Vertical intergration
- when one firm joins with another firm at a different stage of the same production process
Conglomerate intergration
- when one firm joins with another firm at a different production process.
Advantages of intergration
- Horizontal intergration can lead to economies of scale as more of the same kind of output is…
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