Different Size of Firms and Integration
Business Growth
Many businesses have an objective and that is to grow in size. Keeping Growth as an objective has its own advantages for the business.
Why businesses set growth as an objectives
Internal Growth or also known as organic growth where the business expands by opening more outlets/factories/offices gradually by using its profits.
External growth involves buying out other business and making them a part of your business. Examples are takeovers and mergers.
Integration can be of three types
Horizontal Integration: when one firm merges with another firm or takes over another one in the same industry and at the same stage of production. Example Vodafone and Hutch
Many businesses have an objective and that is to grow in size. Keeping Growth as an objective has its own advantages for the business.
Why businesses set growth as an objectives
- Possibility of higher profits
- More and salaries for managers
- Economies of scale
Internal Growth or also known as organic growth where the business expands by opening more outlets/factories/offices gradually by using its profits.
External growth involves buying out other business and making them a part of your business. Examples are takeovers and mergers.
Integration can be of three types
Horizontal Integration: when one firm merges with another firm or takes over another one in the same industry and at the same stage of production. Example Vodafone and Hutch