Business Studies - AQA - GCSE - Business Expansion

Josh Anderson
Mind Map by Josh Anderson, updated more than 1 year ago
Josh Anderson
Created by Josh Anderson about 4 years ago
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GCSE Business studies Mind Map on Business Studies - AQA - GCSE - Business Expansion, created by Josh Anderson on 02/03/2016.

Resource summary

Business Studies - AQA - GCSE - Business Expansion
1 Internal Growth
1.1 Advantages
1.1.1 More manageable
1.2 Disadvantages
1.2.1 Slower
2 External Growth
2.1 Merger
2.1.1 When two businesses join together
2.2 Takeover
2.2.1 When a (usually larger) business buys out a (usually smaller) business
2.3 Disadvantages
2.3.1 Less manageable
2.3.2 Costs
2.4 Advantages
2.4.1 Quicker
2.4.2 Already set up
3 Reasons for Expansion
3.1 Market Share
3.2 New Market
3.3 Profits
4 Difficulties when Expanding
4.1 Costs and Risks
4.2 Personal Services
4.3 Increased Workload
4.4 Control
5 Integration
5.1 Backwards integration
5.1.1 When a business buys a previous stage of the production process e.g. Food factory ---> Farm
5.2 Forwards integration
5.2.1 When a business buys a previous stage of the production process e.g. Food factory ---> Retail
5.3 Conglomerate integration (Diversification)
5.3.1 When a business expands into a different production process e.g. Food retail ---> Travel
5.4 Advantages
5.4.1 Share ideas/experience/resources/skills/status
5.4.2 Spreads risk
5.4.3 More opportunity to make a profit
5.4.4 Guarantees quality for other areas (Backwards and Forwards integration)
5.4.5 Widens target market
5.4.6 Removes cost of third parties - Only pay what is needed (Backwards and forwards integration)
5.4.7 Increase market share
5.4.8 Allows economies of scale - Buying larger quantities for a lower unit price.
5.5 Disadvantages
5.5.1 Possible conflicting ideas/lack of control
5.5.2 Possible lack of expertise
5.5.3 Unemployment - Redundancies
5.5.4 Increased workload
5.5.5 Short term expenses
5.5.6 Diseconomies of scale - Paying workers that aren't working efficiently
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