Business Growth Expansion Business Growth Expansion Brainstorm the
Business Growth & Expansion
Business Growth & Expansion Brainstorm the following vocabulary terms and come up with speculative definitions: 1. Merger – 2. Horizontal merger – 3. Vertical merger – 4. Conglomerate – 5. Multinational – http: //www. youtube. com/watch? v=6 WS-Nt. VKw. Dk&feature=relmfu
Business Growth & Expansion Merger – Is the combination of two or more businesses to form one single firm. Business Combinations • When two or more businesses merge, sometimes they combine their name (i. e. Tomber. Tapp) • Sometimes the stronger company that bought out the other company and merged, changes the weaker company’s name to theirs (i. e. Huggies diapers, buys out Dasani water = Huggies Sparkling Water). • Lastly, some companies that merge are one company, have one legal identity, but keep separate names. Why?
Business Growth & Expansion Reasons for Merging • Growth through Reinvestment (Become Larger) Reinvestment is taking the company’s profits (net income) and using that money for growth and expansion. • Growing through Mergers (Efficiency) Acquisition of another company also known as a merger allows the company to grow faster than it can grow by reinvestment.
Business Growth & Expansion http: //www. youtube. com/watch? v=Xm. OFbk 1 a. Vbw Horizontal Mergers • Horizontal Mergers – between companies that produce the same types of goods or services. Examples? Mc. King’s Vertical Mergers • Vertical Mergers – between companies involved in different steps/types of manufacturing or marketing process. Examples? Bountysoft
Business Growth & Expansion Conglomerates Conglomerate – is a firm made up of many unrelated divisions or subsidiaries. • To qualify as a conglomerate the firm must own four or more different companies, none of which contribute a majority of its sales. • Diversification is one of the main reasons to form conglomerates. Multinationals • Multinational Business – is a firm that sells and produces products in multiple countries. • They are important because they can move resources, financial capital, and goods and services.
Conglomeration
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