Edexcel GCSE Business 2.1 Growing the business

What is internal (organic) growth?

• Growth achieved by merging with another company

• Growth achieved by expanding a business’s own operations

• Growth achieved by taking over a competitor

• Growth achieved by reducing costs

Which of the following is an example of external (inorganic) growth?

• Launching a new product

• Research and development

• Merging with another business

• Selling assets to raise capital

Which of the following is an example of organic growth?

• Merging with a competitor

• Expanding into new markets overseas

• Taking over a smaller business

• Selling off underperforming assets

Which type of business ownership is most suitable for large, growing companies?

• Sole trader

• Private limited company (Ltd)

• Public limited company (plc)

• Partnership

What is one advantage of a public limited company (plc)?

• Limited access to finance

• Shares can be sold to the public to raise capital

• Complete control by a single owner

• No legal requirements for reporting financial results

What is a key characteristic of a stock market flotation?

• The company remains privately owned

• The company can sell shares to the general public

• The company is no longer required to report profits

• The company reduces its workforce

What is an internal source of finance for a growing business?

• Loan capital

• Selling assets

• Share capital

• Bank overdraft

Which is an example of external finance?

• Retained profits

• Selling assets

• Loan capital

• Reducing costs

How does share capital help a business grow?

• By reducing the workforce

• By increasing the product range

• By raising funds through the sale of shares

• By cutting operational costs

Why might a business change its aims and objectives?

• To maintain the same goals regardless of performance

• In response to changes in market conditions or legislation

• To avoid adopting new technology

• To increase market stability