When a company grows under its own steam by investing in new projects.
1 of 18
Inorganic/External Growth
Achieved through acquisitions and mergers with other companies.
2 of 18
Forward Vertical Integration
A stage ahead in the chain of production, e.g. wholesaler to retailer.
3 of 18
Horizontal Integration
The same stage of production, perhaps a previous competitor.
4 of 18
Backwards Vertical Integration
A stage behind in the chain of production.
5 of 18
Conglomerate
Unrelated industry.
6 of 18
Advantages and Disadvantages of Vertical Integration
A: Greater control over supply chain, better access to raw materials. D: Culture clash and diseconomies of scale.
7 of 18
Advantages and Disadvantages of Horizontal Integration
A: Economies of scale, spreading risk and reducing competition. D: Culture clash and diseconomies of scale.
8 of 18
Advantages and Disadvantages of Conglomerate Integration
A: Spreads risk and benefit from knowledge from other market. D: Requires different skill sets, don't always benefit from economies of scale and culture clash.
9 of 18
Constraints on Growth
Size of market, Access to finance, Owners objectives and Regulation.
10 of 18
Demergers
The separation of a large company into two or more smaller organisations, usually because of slumping profits, lack of synergies and contrasting focuses of companies.
11 of 18
Impact of Demergers
Workers: More jobs created, possible redundancies, working in small teams may be nicer. Firms: Increased value, More focused, Removes inefficiencies. Consumers: More competition= cheaper prices, better service.
12 of 18
MNC
Has a head office in one country but sells its products in different countries too.
13 of 18
TNC
Has a head office in one country but has offices and production facilities in multiple countries.
Comments
No comments have yet been made