offensive reasons for expansion

Cards (4)

  • increasing profits - a business may want to grow n size in order to make more profits - these firms tend to have larger sales and lower costs as they benefit from economies of scale
  • acquire new products - a business may not have the time or money to develop new products for consumers - instead it might buy other businesses that have developed or are in the process of developing newer products
  • asset stripping - a business may buy a company purely to gain access to certain assets owned by that business - kt intends to use those assets rather than continue to run the acquired business
  • eliminating competition - a business can expand by taking over competitors to maintain a dominant position in the market, thus increasing the firms market share