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Question
Explain in brief the three ways in which an organisation can expand externally.
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Solution
The three ways in which an organisation can expand externally are:
- Franchising: Franchising is an arrangement through which the manufacturer or sole distributor of a trademarked product or service gives exclusive rights of local distribution to independent retailers in return for royalties and conformance to standardized operating procedures,
- Merger: It is the combining of two firms into a single large firm.
- Acquisition: Acquisition or takeover is enveloping in itself a range of acquisition transactions by a firm.
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