• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Discuss why do firms want to grow and means of growth

Page
  1. 1
    1
  2. 2
    2
  3. 3
    3
  4. 4
    4
  5. 5
    5
  6. 6
    6
  • Essay length: 598 words
  • Submitted: 11/07/2002
Share this essay:
University Degree Microeconomics

The first 200 words of this essay...

"Discuss why do firms want to grow and means of growth"

Mazin Abdel-Rahman

The existence of internal economies of scale provides a major force encouraging firms to enlarge. There are different ways in which firms can grow, generally they can be described as internal and external growth.

Internal growth occurs when firms use their own profits to finance an expansion of capacity. External growth occurs when firms integrate in the form of mutual agreement in the form of a merger or in the form of a takeover, where one firm acquires control of a minimum fifty-one percent of another firms equity.

* Integration

There are two types of integration, vertical and horizontal, vertical integration in further split into two types, backward and forward integration.

Backward integration occurs when one firm integrates with another firm, which supplies input. Therefore firm (A) integrates with firm (B) which provides which provides firm (A's) raw material. Forward integration occurs when firm (A) integrates with firm (B), were firm (B) is the retail outlet of firm (A) products.

Horizontal integration occurs when firm (A) integrates with firm (B), were both

Read more
The above preview is unformatted text

Found what you're looking for?

  • Start learning 29% faster today
  • Over 150,000 essays available
  • Just £6.99 a month

  • "
    Markedbyteachers.com has helped me achieve better marks than I could ever have hoped for, by providing some of the best essays on the internet that have helped me structure my own degree level assignments, thank you so much.
    "
    Kim. Nursing, Mental Health, Psychology. University Student.
  • "
    A fantastic website, it's also convenient to use, user-friendly, and has excellent customer services.
    "
    Lex Fawste. English, Biology, Physics, Maths, and Chemistry. A Level Student.

Marked by a teacher

This essay has been marked by one of our great teachers. You can read the full teachers notes when you download the essay.

Peer reviewed

This essay has been reviewed by one of our specialist student essay reviewing squad. Read the full review on the essay page.

Peer reviewed

This essay has been reviewed by one of our specialist student essay reviewing squad. Read the full review under the essay preview on this page.