Types of Growth

• What are the types of growth in business?

  Backwards, forwards, horizontal, conglomerate integration
• How do types of growth differ from methods of growth?

  Types refer to growth forms, methods are strategies
• What are the methods of growth in business?

  • Mergers
  • Takeovers
  • Joint Ventures (JVs)
  • Franchising
• What is backwards vertical integration?

  Expanding operations closer to suppliers
• Why would a business pursue backwards vertical integration?

  To secure supply chain and reduce dependency
• How does backwards vertical integration relate to Porter's 5 Forces?

  It increases supplier power and profitability
• What is forwards vertical integration?

  Expanding operations closer to the end consumer
• Why would a business pursue forwards vertical integration?

  To gain control over retail outlets and distribution
• How does forwards vertical integration affect buyer power?

  It reduces buyer power for the manufacturer
• What is horizontal integration?

  Acquiring or merging with similar companies
• Why would a business pursue horizontal integration?

  To increase market share and achieve economies of scale
• How does horizontal integration affect competition in an industry?

  It reduces the number of rivals in the market
• What is conglomerate integration?

  Expanding into unrelated industries for diversification
• Why would a business pursue conglomerate integration?

  To spread risk and create potential synergies
• How can conglomerate integration create synergies?

  By combining resources from different industries
• What are the potential benefits of horizontal integration?

  • Increased market share
  • Reduced competition
  • Achieving economies of scale
  • Lower average costs per unit
• What are the potential benefits of conglomerate integration?

  • Risk diversification
  • Potential for synergies
  • Capital reallocation
  • Access to new markets