Business Growth Quiz

What is a disadvantage of a merger or takeover?

• It does not always work

• It always works

• It guarantees success

• It reduces costs

What is one advantage of internal growth?

• Less risk than external growth

• More risk than external growth

• Higher costs

• Limited market reach

What is Conglomerate Integration?

• When a business takes over its suppliers.

• When a business merges with another in a different type of production process.

• When a business buys or merges with other businesses producing similar products.

• When a business takes over another business to control distribution.

What does Managerial Internal Economies of Scale involve?

• Using machinery 24/7 to lower costs.

• Borrowing large sums of money to negotiate lower interest rates.

• Spreading administrative costs over all goods produced.

• Selling products to wider markets.

What is the benefit of control over sales in business?

• Increased production costs.

• Reduced advertising.

• Deciding where to sell and how much to advertise.

• Increased risk.

What does the term 'Economies of Scale' refer to?

• Increasing costs with increased production.

• Lowering unit costs with increased production.

• Increasing risks with increased production.

• Lowering profits with increased production.

What is a franchise?

• A type of business organization

• The right given by one business to another to sell goods or services using its name

• A method of internal growth

• A type of advertising strategy

What is a franchisee?

• A business that provides training to others

• A business that pays royalties to sell goods or services using another's name

• A type of advertising strategy

• A method of internal growth

What is a benefit of expanding through opening own shops?

• Receipt of royalties

• No need to monitor operations

• Retain independence and control

• Spreading of risks

What is a potential risk for a franchisor?

• Franchisee enthusiasm

• Increased profits

• Bad publicity from franchisees

• Exclusive area