Business chapter 1.4 , 1.5

Economies of scale

The cost advantages that a business gains due to expansion. These advantages arise when production becomes more efficient as the scale of output increases.

Diseconomies of scale

The situation where the cost per unit of output increases as the scale of production increases, beyond a certain point. This can occur due to inefficiencies in large-scale operations.

Internal growth strategies

Strategies that involve increasing a company's market share, sales revenue, and profitability through activities such as product development, market penetration, and diversification, without relying on mergers or acquisitions.

Market share

The percentage of total sales in a market that is captured by a company, calculated as the company's sales revenue divided by the total market sales revenue.

External growth strategies

Strategies that involve increasing a company's market share, sales revenue, and profitability through mergers, acquisitions, or strategic alliances with other companies.

Sales revenue

The total amount of money received by a company from selling its goods or services during a specific period.

Brand image

The perception or reputation of a brand in the minds of consumers. It is influenced by factors such as brand identity, product quality, customer service, and marketing efforts.

Profitability

The ability of a company to generate profit relative to its expenses and other costs. It is typically measured using metrics such as net income margin, return on investment (ROI), or return on assets (ROA).

Internal sources of finance

Funds obtained from within the company, such as retained earnings, sale of assets, or reinvestment of profits.

External sources of finance

Funds obtained from outside the company, such as bank loans, issuing bonds, or seeking venture capital investment.

Shareholders' interest

The collective interests of a company's shareholders in maximizing the value of their investment through factors such as dividend payments, stock price appreciation, and corporate governance.

Shareholder conflict

Disagreements or disputes among shareholders regarding the management, direction, or decisions of a company, often related to conflicting interests or objectives.

Strategic plans

Long-term plans developed by a company to outline its goals, objectives, and strategies for achieving sustainable growth and competitive advantage.

Horizontal integration

Buying companies in the same industry.

Forward vertical integration

Buying companies in the supply chain after you

Backward integration

Buying companies in the supply chain before you.

Conglomerate M&A

Buying companies in different industries.