Business Growth: Mergers and Takeovers

Turnover

Value of sales or revenue generated by a firm.

Volume of Sales

Quantity of products sold by a firm.

Market Share

Firm's sales as a percentage of total market sales.

Capital Employed

Firm's net assets and investments for returns.

Profits

Earnings after costs; varies yearly and economically.

Employees

Number of people working for a firm.

Number of Stores

Total outlets operated by the firm.

Survival

Necessity for firms to grow to remain viable.

Economies of Scale

Cost per unit decreases as production increases.

Long Term Profit Maximisation

Growth aimed at increasing future profitability.

Gaining Market Share

Increasing sales percentage to enhance pricing power.

Reduce Risk

Diversification to mitigate potential business failures.

Internal Growth

Expansion using firm's own resources.

External Growth

Expansion through mergers or acquisitions.

Organic Growth

Increasing sales of existing products in current markets.

Diversification

Branching into new markets and products.

Merger

Joining of two businesses to form a new entity.

Take-over

Purchase of one business by another, with or without consent.

Horizontal Integration

Merging of firms at the same production stage.

Vertical Integration

Merging of firms at different production stages.

Forward Vertical Integration

Merging with a firm at the next production stage.

Backward Vertical Integration

Merging with a firm at the previous production stage.

Conglomerate Integration

Merging of firms in completely different industries.

Financing Growth

Choosing between internal or external finance sources.

Cash Flow

Management of incoming and outgoing cash in business.

Overtrading

Growing too fast, leading to cash flow issues.

Forecasting and Planning

Predicting future performance in unfamiliar markets.

Forecasting Difficulty

Challenges in predicting future business trends.

Organizational Structure

Framework defining roles and responsibilities in a firm.

Loss of Control

Decreased oversight in larger organizations.

Communication Challenges

Increased difficulty in information sharing.

Loss of Focus

Dilution of core business values and brand identity.

Diseconomies of Scale

Increased per-unit costs due to inefficiencies.

Market Saturation

Point where demand for a product peaks.

Legal Restrictions to Growth

Laws preventing anti-competitive behavior.

Fast Fashion

Quickly producing trendy clothing styles.

Economies of Scale (EoS)

Cost advantages from increased production.

Competition and Markets Authority (CMA)

UK body regulating competition and mergers.

Competition Act 1998

Legislation governing UK competition policy.

Restrictive Practices

Agreements limiting competition among firms.

Dominant Market Position

Firm holding over 40% market share.

Merger Investigation

Review of mergers exceeding 25% market share.

Appeals Process

Reviewing decisions made by competition authorities.

European Legislation

EU laws regulating cross-border competition.

Mega-Merger

Mergers with significant global turnover.

Article 101

Prohibits anti-competitive agreements in EU.

Article 102

Prohibits abuse of dominant market position in EU.

Utility Regulators

Bodies overseeing privatized utility industries.

Oligopoly

Market structure dominated by a few firms.

Price-Fixing

Collusion to set prices among competitors.