1.7 Expanding a Business

Which method of growth involves employing another business to produce products or provide services?

• E-commerce

• Franchising

• Outsourcing

• Merger

Which of these is a type of diseconomy of scale?

• Increased motivation

• Investment in technology

• Lower average unit costs

• Poor communication

Which of the following is a potential disadvantage of outsourcing?

• Access to specialised skills

• Cost savings

• Loss of control over quality

• Increased focus on core activities

Which growth strategy involves a company merging with another company in the same industry?

• Horizontal integration

• Forwards Vertical integration

• Conglomerate merger

• Backwards Vertical integration

Which of the following is a benefit of vertical integration?

• Reduced dependency on suppliers

• Higher advertising costs

• Increased competition

• Lower employee retention

What is a potential drawback of a merger between two companies?

• Access to new markets

• Larger market share

• Cultural clashes

• Increased innovation

Which method of growth involves a company acquiring another company in a different industry?

• Horizontal integration

• Backwards Vertical integration

• Conglomerate merger

• Forwards Vertical integration

Which of the following is a potential risk of a merger?

• Enhanced brand recognition

• Economies of scale

• Employee redundancies

• Increased market share