Business growth 2

If several independent firms in the same office block share the use of a secretary and receptionist, then this is an example of a(n)

• Economies of scale

• Joint venture

• Organic growth

• Strategic alliance

Which of the following is least likely to be an advantage of forming a strategic alliance

• Firms enjoy some of the advantages of mergers without losing their corporate identity

• Profits from the strategic alliance can be shared equally

• Strategic alliances are founded on friendly, cooperative and mutual agreements

• They are not as expensive as takeovers or mergers

When two different organizations contribute resources to a shared project by forming a separate business, this is known as

• A joint venture

• A strategic alliance

• Collaboration

• External growth

Which statement below does not apply to franchises?

• The failure rate is low as franchisees are generally very motivated

• The franchisee can buy or lease a franchise

• The franchisor can expand its business without incurring huge debts

• The franchisors have little control over the way the business operates

The franchise is the

• Person or business selling the right for others to use their name, logos or products

• Person who buys the right to use someone else's products, logo pr brand name

• Right to trade using another firm's products, brand name and logo

• Use of methods of external growth to enlarge a multinational corporation

Reasons for airlines to form a strategic alliance include all the following, except

• The airline companies keep their separate legal identities

• They benefit from economies of scale from combined purchasing and marketing power

• They can cover more destinations by joining forces

• They can grow through diversification

A franchisee offers a franchise to a franchisor.

• True

• False

Which of the following does not reflect disadvantages of joint ventures?

• Diseconomies of scale

• Loss of control

• Culture clash

• Dilution of brand

The franchisee pays a _________ based on the sales revenue of the franchisee to the franchisor.