business and management
Franchisee
A franchisee is the person or company that is granted a license to do business under the franchisor's trademark, trade name, and business model, by the franchisor. The franchisee purchases a franchise from the franchisor.
Joint Venture
A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Most joint ventures are incorporated, although some, as in the oil and gas industry, are "unincorporated" joint ventures that mimic a corporate entity.
Multinational company
A multinational corporation or worldwide enterprise is an organization that owns or controls production of goods or services in one or more countries other than their home country. It can also be referred as an international corporation, a "transnational corporation", or a stateless corporation.
Strategic Allience
A strategic alliance (also see strategic partnership) is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations. A strategic alliance will usually fall short of a legal partnership entity, agency, or corporate affiliate relationship.
Takeover
A takeover occurs when an acquiring company makes a bid in an effort to assume control of a target company, often by purchasing a majority stake. If the takeover goes through, the acquiring company becomes responsible for all of the target company's operations, holdings and debt. When the target is a publicly traded company, the acquiring company makes an offer for all of the target's outstanding shares.
Acquisition
An acquisition is a corporate action in which a company buys most, if not all, of the target company's ownership stakes to assume control of the target firm. Acquisitions are often made as part of a company's growth strategy when it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company's stock or a combination of both.
Diseconomies of scale
Diseconomies of scale is an economic concept referring to a situation in which economies of scale no longer functions for a firm.
Economies of scale
Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because of the inverse relationship between the quantity produced and per-unit fixed costs; i.e. the greater the quantity of a good produced, the lower the per-unit fixed cost because these costs are spread out over a larger number of goods.
External growth
External growth is when a business or a company increases its profits through mergers and acquisition rather than its operation. The main goal is to bring the external finance into the company and achieve greater market share.
Franchisor
Franchising is a long-term cooperative relationship between two entities—a franchisor and one or more franchisees—that is based on an agreement in which the franchisor provides a licensed privilege to the franchisee to do business.
Franchising
Franchising is the practice of the right to use a firm's business model and brand for a prescribed period of time. The word "franchise" is of Anglo-French derivation—from franc, meaning free—and is used both as a noun and as a (transitive) verb.
Merger
From a legal point of view, a merger is a legal consolidation of two entities into one entity, whereas an acquisition occurs when one entity takes ownership of another entity's stock, equity interests or assets.
Internal growth
Internal growth is typically a slower process, and can be financed by asking shareholders to contribute more capital, or by ploughing back profits into the business. The main disadvantage of such an approach is that it takes time, and in the meantime rivals may be expanding and gaining competitive advantage.
Globalization
The process by which businesses or other organizations develop international influence or start operating on an international scale.