Page 73 - BA1 Integrated Workbook STUDENT 2018

Strategic options and choice

Methods of expansion

Expansion can take many forms, including:

Acquisition/merger Organic growth

Rapid access to resources Can be cheaper

Fewer barriers to entry Easier to control/spread out the costs

Less competitor reaction Arguably less risk

Cultural problems in the new merged Often relatively slow
business

An alternative would be to find a way of expanding in partnership with other
organisations/businesses. This could include:

 joint ventures – jointly owned separate entity

 strategic alliances – working together with another organisation for mutual
benefit

 franchising – selling the right to exploit a business brand for a capital sum and
a share of the profits

 licensing – selling the right to exploit an invention or resource in return for a
share of the proceeds.

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