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Pricing Schools Business

Features Pricing Schools Business

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External Expansion in Business

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Questions and Answers

What is external expansion?

Expanding only in the local market

Expanding within the existing business structure

Expanding by working with other businesses (correct)

Expanding through government grants

What is a merger?

When a firm buys more than half the shares in another firm

When two firms join together to form a new, larger firm (correct)

When a firm diversifies into new markets

When a firm takes over a competitor

Why does a firm take over a supplier according to the text?

To reduce economies of scale

To cut off the supply chain

To control the supply, cost, and quality of raw materials (correct)

To increase competition in the market

How does taking over a customer benefit a firm?

Gives the firm greater access to customers (A) Signup and view all the answers

Which type of external expansion creates a firm with more economies of scale and a bigger market share?

Merger with a competitor (D) Signup and view all the answers

What happens when two unrelated firms join together in external expansion?

Expansion by diversifying into new markets (A) Signup and view all the answers

What did Kraft Foods Inc. achieve by buying Cadbury in 2010?

Became the largest seller of chocolate and confectionery in the world (C) Signup and view all the answers

Why do less than half of all takeovers and mergers succeed?

Because it is challenging to integrate two different businesses successfully (A) Signup and view all the answers

What may happen if a takeover bid is hostile and unpopular?

The takeover will create bad feelings and resistance among the stakeholders (A) Signup and view all the answers

How do mergers and takeovers often lead to uncertainty among workers?

By implementing cost-cutting measures leading to job redundancies (A) Signup and view all the answers

Which aspect can make it difficult for two firms to integrate after a merger or takeover?

Differing management styles and company cultures (C) Signup and view all the answers

What is a common result of mergers and takeovers in terms of workforce?

Making lots of people redundant (D) Signup and view all the answers