Expanding a business (AQA GCSE Business): Flashcards

Growing through mergers or takeovers, not organically

One company buys controlling interest (>50% shares) in another

When the business being acquired resists the takeover

Two companies voluntarily combine to create a new entity

Lower costs per unit as business grows larger

Higher costs per unit when business becomes too large

Less competition, more market share, higher prices possible

Spreads risk if businesses offer different products

Businesses can share skills, knowledge, and technology

Culture clashes between businesses can reduce success

Workers (especially managers) may be made redundant

More than half of the target company's shares

Easier to get cheaper materials through bulk buying