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Business Growth and Expansion

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Presentation on theme: "Business Growth and Expansion"— Presentation transcript:

1 Business Growth and Expansion

2 Growth through Reinvestment
Company reinvests profit back into company Main way for small businesses to grow Can reinvest profits into another franchise

3 Growth through mergers
One company gives up its legal identity to another Reasons for merging Faster growth – Wells Fargo and Wachovia Improved efficiency – Fiat and Chrysler Need to acquire new product lines – AMD and ATI Catch up or eliminate rival – Home Depot and Yardbirds or Coca-Cola and Inca Cola Remake identity – Cingular and AT&T

4 Types of Mergers Horizontal Merger – two firms make the same type of product Home Depot and Yardbirds Vertical Merger – Firms in different steps of manufacturing or marketing process Ford buys a steel company

5 Four types of monopolies
Geographic – Ex. Small town with only one gas station. Technological – Patents and copyrights Natural – To be profitable, must be able to serve large number of customers – utilities. Governmental – post office and Amtrak, business licenses

6 Business Expansion cont.
Conglomerate – firm that operates in at least 4 different industries Multinational – firm with manufacturing or service operations in different countries Alliances – companies don’t merge but help each other. Ex. McDonald’s and Coca-Cola or Starbucks and Pepsico

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