Business Growth 1

Which of the following is not a valid argument for pursuing growth as an objective?

• to achieve internal economies of scale

• to increase market share

• to increase the chances of business survival

• to minimise communication problems

Which one of the following is the primary benefit of forming a conglomerate?

• Economies of scale

• Focused marketing

• Market power

• Spreading risks

A business grows in size due to its own finance and retained profits. This is known as

• A conglomerate

• An acquisition

• External growth

• Organic growth

A merger between two newspaper companies is an axample of

• Conglomerate

• Horizontal

• Lateral

• Vertical

Organic growth cannot be achieved through increased

• Capital expenditure

• Labour turnover

• Prices for certain goods and services

• Sales turnover

Which of the following does not explain why small firms can survive and flourish

• Being able to provide a personalized service

• Choice of finance options

• Financial aid from the government

• Local monopoly power

Which of the following cannot be applied to internal growth?

• Financed through retained profits of a firm

• Relatively cheaper method of growth

• Relies on the production and marketing of a firm's products

• Suitable for firms looking to grow rapidly

In 2006, L'Oreal acquired The Body Shop. This is an example of

• A management buy-out

• A merger

• Diversification

• Horizontal integration

An advantage, to the buyer, of a takeover bid includes

• Changes to corporate cultures

• Changes to the corporate identity

• Possible staff redundancies

• Potential market dominance