IB Business 1.5 & 1.6

What are the key factors that contribute to the growth and evolution of a business?

• Luck, weather, and social media presence

• Number of office plants, employee dress code, and office holiday parties

• Employee turnover, office location, and company logo

• Innovation, market demand, effective leadership, financial management, and strategic planning

Explain the concept of economies of scale and how it relates to business growth.

• Economies of scale only apply to large businesses and have no relevance to small or medium-sized businesses.

• Economies of scale have no impact on business growth or production costs.

• Economies of scale can help businesses reduce their average costs as they increase their production levels.

• Economies of scale cause businesses to increase their average costs as they decrease their production levels.

How does market saturation affect the growth of a business?

• It can limit the potential customer base and increase competition, making it harder for a business to grow.

• It has no impact on the growth of a business

• It reduces the need for marketing and advertising

• It leads to increased customer loyalty and brand recognition

What are the different stages of the business life cycle and how do they impact growth?

• The different stages are introduction, growth, maturity, and decline, and they impact growth differently at each stage.

• The different stages are establishment, advancement, saturation, and downfall, and they all result in steady growth.

• The different stages are birth, development, stability, and decay, and they all lead to rapid growth.

• The different stages are inception, expansion, plateau, and regression, and they have no impact on growth.

What are the main reasons for a company to become multinational?

• Reduce global presence, limit customer base, increase operational risk

• Access new markets, reduce costs, gain access to resources, and diversify operations

• Increase competition, reduce profits, limit growth

• Decrease market share, increase costs, limit innovation

Discuss the challenges that multinational companies face in terms of cultural differences.

• Cultural assimilation, shared work ethics, and uniform management styles

• Language barriers, similar work ethics, and consistent management styles

• Effective communication, common work ethics, and standardized management styles

• Communication barriers, different work ethics, and varying management styles

How do multinational companies manage their supply chain across different countries?

• Implementing advanced technology, establishing strong communication channels, conducting thorough risk assessments, and collaborating with local partners

• Not conducting any risk assessments and assuming everything will go smoothly

• Having poor communication and coordination among different branches

• Ignoring technological advancements and relying solely on manual processes

What are the advantages and disadvantages of multinational companies for the host country?

• Multinational companies always prioritize the host country's interests over their own, leading to a loss for the company and its shareholders.

• Multinational companies have no positive impact on the host country. They only focus on their own profits and do not contribute to the local economy.

• Multinational companies bring in foreign investment, technology, and job opportunities to the host country. However, they may also have negative impacts such as exploiting local labor, creating unfair competition for local businesses, and environmental degradation.

• Multinational companies bring in foreign investment, technology, and job opportunities to the host country. However, they may also have negative impacts such as exploiting local labor, creating unfair competition for local businesses, and environmental degradation.

Which external growth method offers opportunities for rapid expansion and access to new markets?

• Mergers and acquisitions

• Franchising

• Licensing

• Joint ventures and strategic alliances

What must a business consider when contemplating a joint venture?

• Potential loss of control over decision-making

• Shared resources and risks

• Financial investment required

• Market competition analysis