3.1.2 - Business Growth

    Cards (9)

    • What are the two main types of business growth?
      Organic and inorganic growth
    • What is organic growth?

      Internal expansion by increasing output and customer base
    • What is inorganic growth?

      Expansion via mergers and acquisitions
    • What are economies of scale?

      Reducing per-unit costs through expansion and efficiencies
    • What are diseconomies of scale?

      Inefficiencies from over-expansion, such as communication and motivation issues
    • What are some constraints on growth?

      Market size, financial limits, regulations, and resource shortages
    • What are the motivations for business growth?

      • Increase market share
      • Achieve economies of scale
      • Diversification
      • Compete more effectively
    • What is the relationship between business growth and economies of scale?

      • Business growth can lead to economies of scale
      • Economies of scale reduce per-unit costs
      • However, growth can also lead to diseconomies of scale if over-expansion occurs
    • What does the summary of business growth entail?

      • Involves expanding market presence and capabilities
      • Can be achieved organically or inorganically
      • Provides benefits like economies of scale
      • Poses challenges like diseconomies of scale and growth constraints
    See similar decks