3.2.4 Growth vs. Staying Small in Business

What is one advantage of business growth?

• Increased operational costs

• Greater market share

• Difficulty in managing employees

• Limited customer base

Which of the following is a challenge faced by small businesses?

• High employee turnover

• Limited access to capital

• Excessive bureaucracy

• Overexpansion

How does market competition impact small businesses?

• It eliminates the need for innovation

• It reduces the need for customer service

• It encourages differentiation and niche marketing

• It guarantees customer loyalty

Why might a business choose to stay small?

• To avoid paying taxes

• To maintain a personal connection with customers

• To limit product offerings

• To reduce employee satisfaction

What is a benefit of customer loyalty for small businesses?

• Increased advertising costs

• Reduced need for quality control

• Consistent revenue stream

• Decreased brand recognition

Which of the following is a reason for a business to remain small?

• To increase regulatory compliance

• To focus on a niche market

• To expand into international markets

• To increase production capacity

What is a potential disadvantage of business growth?

• Increased brand recognition

• Economies of scale

• Diseconomies of scale

• Enhanced customer service

How can small businesses compete effectively in a competitive market?

• By reducing product quality

• By offering unique products or services

• By ignoring customer feedback

• By increasing prices significantly

Which of the following is an advantage of business growth?

• Increased risk of financial instability

• Increased market power

• Reduced market presence

• Limited product offerings

Why might a small business have strong customer loyalty?

• Due to high prices

• Due to impersonal service

• Due to personalised customer service

• Due to limited product range