business studies

business studies

what is business growth?

expansions of a businesses activities, either by increasing its own operations or by joining with/taking over others.

why do businesses want to grow?

to boost profits, beat rivals, increase market share, lower costs, gain financial support, improve reputation, and build brand loyalty.

what is market share?

the percentage of total sales in a market that a business controls.

how can a business grow internally?

adds new products, hires staff, opens branches, invests in tech.

how does a business grow externally?

merges with or taxes over other businesses

what is a merger?

when 2 or more businesses agree to combine and operate as one.

what is to take over?

one business buys another, often to remove competition or expand quickly.

what is horizontal integration?

combining with a business in the same industry and production stage.

what is vertical integration?

combining with a business at a different production stage.

what is backward vertical integration?

vertical integration with a supplier.

what is forward vertical integration?

vertical integration with a distributor/retailer.

what is conglomerate integration?

merging with a business in a completely different industry.

give 3 benefits of conglomerate integration.

-diversifies products, increasing survival chances.

-more sources of income.

-spreads business risks

what are economies of scale?

cost advantages a business gains as it grows larger, leading to lower average costs.

name 7 types of economies of scale.

production, technological, marketing, financial, purchasing, risk bearing, managerial.

what are production economies of scale?

cheaper, more efficient production using advanced tech and automation.

what are technological economies of scale?

use of modern machinery increases efficiency and lower costs.

what are marketing economies of scale?

can afford wide advertising, promotions, and reach more customers.

what are financial economies of scale?

easier to get loans and better rates from banks.

what are purchasing economies of scale?

bulk buying leads to discounts and better rates from banks.

what are risk bearing economies of scale?

can spread risks across more products/markets.

what are managerial economies of scale?

can hire specialized managers for better efficiency.

what are SMMEs?

small, medium, and micro enterprises- businesses with fewer than 100 employees, operating on a small scale, often local and informal.

how do SMMEs increase competition in an economy, and what is the effect on customers?

SMMEs break up monopolies, increase competition, and give consumers more choices and lower prices.