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Growth is always an essential part of a business for its existence. A business can only survive in the market and earn more profits if it grows from time to time. Rohan and Seema are planning to expand their business. They have started formulating growth strategies. Rohan has suggested a few ways to Seema which they can adopt. According to Rohan, they may expand the firm using external growth strategies. A few of them includes, Franchising, Mergers and Acquisitions. Keeping Rohan’s suggestion in mind, state whether it is true or not.
  • a)
    True
  • b)
    False
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Growth is always an essential part of a business for its existence. A ...
  • Franchising: A franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand's trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system.
  • Mergers: A merger is the voluntary fusion of two companies on broadly equal terms into one new legal entity. The firms that agree to merge are roughly equal in terms of size, customers, and scale of operations. After a merger, shares of the new company are distributed to existing shareholders of both original businesses.
  • Acquisitions: An acquisition is when one company purchases most or all of another company's shares to gain control of that company. Purchasing more than 50% of a target firm's stock and other assets allows the acquirer to make decisions about the newly acquired assets without the approval of the company's other shareholders.
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Growth is always an essential part of a business for its existence. A business can only survive in the market and earn more profits if it grows from time to time. Rohan and Seema are planning to expand their business. They have started formulating growth strategies. Rohan has suggested a few ways to Seema which they can adopt. According to Rohan, they may expand the firm using external growth strategies. A few of them includes, Franchising, Mergers and Acquisitions. Keeping Rohan’s suggestion in mind, state whether it is true or not.a)Trueb)FalseCorrect answer is option 'A'. Can you explain this answer?
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