External Growth Flashcards

1️⃣ Familiarise yourself with the flashcards:

Look through all the flashcards to see what's on both sides.
Make sure you understand the information on each card. If something's unclear, click the link to the revision notes at the bottom of the page for more details.

2️⃣ Test yourself:

Look at the question or prompt on each card and try to remember the answer before flipping it over.
Check the answer and make a note of any cards you find challenging and need to go over more.

3️⃣ Consistently Review and Practice:

Use spaced repetition: spend more time on the cards you struggle with and go over them more often.
Regularly review all the flashcards to help you better understand and retain the information over time.

Note: We may include questions that have multiple correct answers. It's useful to remember specific examples to understand these concepts better.

PERSONALISED 1-TO-1 TUTORING

Get support with clear explanations, practice and feedback (Ages 5 to 16).

Want an ad-free experience? Subscribe to remove ads

What does external growth mean?

When a business grows by joining with or buying another business.

Two businesses agree to join to form one larger business.

One business buys another and takes control.

Joining with a business in the same industry and at the same stage of production.

Joining with a business at a different stage in the same supply chain. Forward is towards customers; backward is towards suppliers.

Joining with a business in a different industry to diversify risk.

By economies of scale, so average cost per unit falls as output rises.

It removes a competitor and adds their customers to the business.

It gives access to new markets, brands, technology, or distribution channels.

When a bigger business becomes less efficient, with slower decisions and higher costs.

Different ways of working cause conflict and low morale after joining.

The combined business can do more than the two could apart.