1. How can businesses grow? [5mins]
Let’s think about it…!
How can businesses grow? [5mins]

2. TOPIC: Topic 1: Business Organization and Environment
LESSON TITLE: Business Growth
COMPETENCY FOCUS:
Entrepreneurship (S4): To develop your entrepreneurial skills in preparing a realistic proposal for a new business start-up. You will understand the process a business will have to go through when starting up, including the underlying principles of starting a business.  
[IB Learner Profile Development: Inquirer]
Learning Objectives
By the end of the lesson, you should be able to…
LO1) To define the term ‘growth’
LO2) To explain using examples, the difference between internal and external growth
LO3) To evaluate joint ventures, strategic alliances, mergers and takeovers as methods of achieving a firm’s growth objectives.
SMSC: You will assess the organisational culture of businesses in terms of fundamental structure, purpose and strategy development.
CRITICAL THINKING KEY:
Knowledge Application Analysis Evaluation

3. Why do businesses want to grow and expand?
Increase profits
Increase market share
Increase economies of scale
Increase their power, status and reputation
Reduced their risk of being a takeover target

4. Business Growth
Internal Growth External Growth Mergers Takeover

5. Business Growth Internal Growth (Organic Growth) can be done by:
Opening new branches
Opening new shops
Opening new factories
Building a bigger factory/production plant

6. Business Growth External Growth can be done by:
Merging with another business (competitor perhaps?). Both businesses are now controlled by one Board of Directors.
Takeover/acquisition of another business. A company buys over 50% of the shares and therefore becomes the controlling owner.

8. Task
Research each of the forms of external growth and complete the table below:
Type of Integration
Advantages
Disadvantages
Impact on stakeholders
Horizontal Integration
Forward Vertical Integration
Backward Vertical Integration
Conglomerate Integration

9. Reflection
Complete learning log & keyword glossary.

10. TOPIC: Topic 1: Business Organization and Environment
LESSON TITLE: Business Growth
COMPETENCY FOCUS:
Entrepreneurship (S4): To develop your entrepreneurial skills in preparing a realistic proposal for a new business start-up. You will understand the process a business will have to go through when starting up, including the underlying principles of starting a business.  
[IB Learner Profile Development: Inquirer]
Learning Objectives
By the end of the lesson, you should be able to…
LO1) To define the term ‘growth’
LO2) To explain using examples, the difference between internal and external growth
LO3) To evaluate joint ventures, strategic alliances, mergers and takeovers as methods of achieving a firm’s growth objectives.
SMSC: You will assess the organisational culture of businesses in terms of fundamental structure, purpose and strategy development.
CRITICAL THINKING KEY:
Knowledge Application Analysis Evaluation

11. Other types of growth…
Joint Venture
Strategic Alliance
Franchising

12. Joint Ventures
This is when 2 or more businesses agree to work closely together on a particular project and create a separate division to do so.
Advantages:
Costs and risks are shared
Shared skills, strengths and knowledge
More powerful to enter new markets (i.e. international markets)
Disadvantages:
Styles of management and culture do not blend well
If one partner fails, the JV is at risk

13. Strategic Alliances
An agreement between firms in which each agrees to commit resources to achieve an agreed set of objectives.
[Therefore working in partnership with someone or another organisation for mutual benefit]
Examples of alliances:
With universities
With suppliers
With competitors

14. Franchising
A business that uses the name, logo and trading systems of an existing successful business i.e. Subway, McDonalds. Involves a ‘Franchisee’ and a ‘Franchisor’.

15. Exam Practice
Read case study and respond to questions Pg. 75 ‘Jet Airways takes over Air Sahara’. [35 marks, 50mins]

16. Business Plan
Update Business Plan.