1.7 Expanding a Business AQA

Internal growth (also known as organic growth)?

occurs when a business gets bigger by selling more of its products

External growth (also called integration)?

Occurs when a business gets bigger by joining or buying other businesses

Market capitalisation?

Measures the value of all a business’s shares = market price of share / number of shares

Franchise?

occurs when a franchisor sells the rights to its products to a franchisee; this is usually in return for a fee and percentage turnover

franchisee

Buys a franchise, usually in return for a fee and percentage turnover

franchisor?

Sells a franchise, usually in return for a fee and percentage of turnover

E-commerce (or electronic commerce)?

the act of buying or selling a product using an electronic system such as the internet

Outsourcing

Occurs when a business uses another business to produce for it

Takeover (or acquisition)?

Occurs when one firm gains control of another