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Methods of growth
Terms in this set (9)
A merger occurs when two businesses agree to join forces and act as one.
A takeover, arises from one business buying another business. This is usually under duress and in predatory manner.
This is when two companies which operate at the same stage of production of a good decide to merge. It allows them to dominate the market in which they operate as competiton is eliminated and market share is increased.
This is when two companies which operate at different stages of production decide to merge into one.
Backward Vertical Integration
This is when a firm takes over another at an earlier stage of production.
Forward Vertical Integration
This is when one firm takes over another at a later stage of production.
This is when they have the opportunity to enter new markets and produce differnet goods.
This is when two companies have previously joined forces decide to part company and operate individually again.
This involves selling off one or more subsidiary companies orginally belonging to the parent company.
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Unit 5 Economics Terms (Student Version)
Key Business Knowledge
Product Life Cycle and Pricing, Business structures