A2 Micro Business Growth

Cfo Foster
Mind Map by Cfo Foster, updated more than 1 year ago
Cfo Foster
Created by Cfo Foster about 5 years ago
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Description

Overview of unit 3.1

Resource summary

A2 Micro Business Growth
  1. Motives
    1. Economies of scale
      1. Restrict competition
        1. Spread risk
        2. Why big firms exist
          1. Economies of scale
            1. High minimum efficient scale (MES)
              1. High barriers to entry
                1. Legal
                  1. Physical
                    1. Sunk costs
                  2. Principle-agent problem
                    1. Owners (shareholders)
                      1. Long term profits
                      2. Managers (Board of directors)
                        1. Short term sales
                          1. High risk
                            1. Collapse of Lehmen Brothers
                          2. Methods
                            1. Organic
                              1. Retained profit
                              2. Inorganic
                                1. Horizontal merger
                                  1. Backwards vertical integration
                                    1. Forwards vertical
                                      1. Conglomerate
                                        1. Tata
                                    2. Constraints
                                      1. Access to funds
                                        1. Size of market
                                          1. Owner objectives
                                            1. Satisficing
                                            2. Regulation
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