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Business Life Cycle
The Business Life Cycle
| Question | Answer |
|---|---|
| Establishment | Sales are slow and not constant. High risk of failure |
| Growth | Increased sales and introduction of new products |
| Expansion/integration types | Vertical, horizontal, conglomerate |
| Vertical integration | When a business acquires other businesses that either supply them with products or distribute their products to consumers |
| Horizontal integration | When a business acquire or merges with other businesses in the same industry |
| Conglomerate integration | When a business acquires or expands into a separate industry |
| Maturity | Sales slow/plateau and market becomes saturated |
| Post-maturity | Businesses can expand to increase sales or ensure that sales remain constant, else sales will fall. |
| Decline | When sales begin to fall, a business may go bankrupt. In this case, they will either voluntarily or involuntarily cease operationa |
| Voluntary cessation | A business chooses to end operations to reduce debt |
| Involuntary cessation | A business is forced to end operations, due to creditors suing them in court |
| Bankruptcy | A business fails to pay back loans. In this case, personal items are sold to pay back debts |
| Liquidation | Company assets are sold to pay back debts |
| Voluntary administration | A company hires administrators to run their business and reduce financial difficulties |
Created by:
MrMemer
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