Topic 1 Business organisation Growth & evolution. Learning Objectives. Analyse the main types of economies and diseconomies of scale and apply these concepts to business decisions Evaluate the relative merits of small Vs. large organisations Recommend an appropriate scale of operation
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What do businesses
gain from growth?
Increased market share
Buyer – WM Morrisons| price - £3bn
Buyer – Tata| price - £5.8bn
Horizontal integration – same industry and same stage of production
Conglomerate diversification - different industry
Forward vertical integration – same industry, towards customer
"This is a once in a lifetime opportunity to combine two of the most respected and well-known companies in the worldwide sporting goods industry",
= Horizontal integration
Broadcaster BSkyB acquired television set-top box maker Amstrad for about £125m. Sky said that the deal meant they could now save money, design their products in-house and be more innovative.
= Backward vertical integration
For each one, explain the impact on stakeholders