expansion

• What is a potential benefit of business expansion?

  Economies of scale
• What happens to average costs when output increases due to expansion?

  They may decrease due to economies of scale
• What can occur if a business expands too quickly?

  Diseconomies of scale may arise
• What are the two main types of business expansion?

  Internal and external expansion
• What is internal expansion also known as?

  Organic growth
• How can e-commerce contribute to business growth?

  It allows for 24/7 sales opportunities
• What is a disadvantage of running an online business?

  Potential technical issues may arise
• What is one reason for opening new outlets?

  Based on market research findings
• What is a potential risk of opening new outlets?

  Higher costs due to recruitment and training
• What does outsourcing involve?

  Hiring a third party to perform tasks
• Why might outsourcing be beneficial?

  It can lower costs or improve quality
• What is the difference between a merger and a takeover?

  A merger is amicable; a takeover is hostile
• What percentage of shares must be acquired for a takeover?

  51% or more
• What are the two forms of external expansion?

  Mergers and takeovers
• What is a pro of internal expansion?

  It is usually cheaper than external expansion
• What is a con of internal expansion?

  It typically results in slower growth
• What is a pro of external expansion?

  It allows for faster growth opportunities
• What is a con of external expansion?

  It is usually more expensive than internal growth
• What are the pros and cons of internal vs external expansion?

  Internal Expansion:

  • Pros:
  • Usually cheaper
  • Cons:
  • Slower rate of expansion

  
  

  External Expansion:

  • Pros:
  • Faster rate of expansion
  • Cons:
  • Usually more expensive
• What factors should be considered when deciding between internal and external expansion?

  • Cost implications
  • Speed of growth
  • Market research findings
  • Existing business capabilities