A-Level 3.2 Business Growth

What is one of the main objectives of business growth?

• To increase competition

• To achieve economies of scale

• To decrease profitability

• To reduce market share

Which of the following is a benefit of growth in terms of market share?

• Decreased brand recognition

• Increased supplier power

• Increased market power of customers

• Increased profitability

What is a common problem that can arise from business growth?

• Economies of scale

• Overtrading

• Enhanced communication

• Improved customer loyalty

Which of the following is NOT a cause of diseconomies of scale?

• Poor internal communication

• Loss of control

• Bulk purchasing

• Overtrading

What is the difference between economies of scale and diseconomies of scale?

• Economies of scale lead to higher costs; diseconomies lead to lower costs

• Economies of scale lead to cost reductions, while diseconomies increase costs

• Both increase operational efficiency

• Both result in reduced profitability

Which of the following is an example of internal economies of scale?

• Bulk buying discounts

• Specialization within the workforce

• Technological improvements in the industry

• Government support for an industry

What is one reason businesses engage in mergers or takeovers?

• To lose market share

• To increase market power

• To increase internal competition

• To decrease profitability

What is the key difference between a merger and a takeover?

• Mergers involve hostile agreements; takeovers are always voluntary

• Mergers combine two equal companies; takeovers involve one company acquiring another

• Takeovers result in two companies sharing control; mergers do not

• Both terms refer to the same business action

Which type of integration occurs when a company merges with or takes over a supplier?

• Horizontal integration

• Conglomerate integration

• Vertical integration

• Lateral integration

What is conglomerate integration?

• The merging of companies within the same industry

• Integration between companies that operate in different industries

• A merger between a company and its supplier

• A takeover of a competitor