3.1.7 Expanding a business

What is one advantage of organic growth for a business?

• It allows for rapid expansion.

• It maintains company culture and values.

• It requires less initial investment.

• It involves high risk.

Which of the following is a method of external growth?

• Franchising

• Opening new stores

• Mergers and takeovers

• E-commerce expansion

What is a potential disadvantage of business growth?

• Increased unit costs

• Economies of scale

• Improved brand recognition

• Diseconomies of scale

Which of the following best describes purchasing economies of scale?

• Reduced costs due to bulk buying

• Increased costs due to higher demand

• Improved product quality

• Enhanced customer service

What is a common risk associated with business growth?

• Improved communication

• Coordination issues

• Increased staff motivation

• Decreased market share

How can a business achieve organic growth?

• By merging with another company

• By opening new stores

• By acquiring a competitor

• By reducing its workforce

What is the formula to calculate average unit cost?

• Total cost / Total revenue

• Total revenue / Total units produced

• Total cost / Total units produced

• Total units produced / Total cost

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

• Bulk purchasing discounts

• Specialised machinery reducing production costs

• Increased advertising reach

• Improved customer loyalty programmes

What is a benefit of growth in terms of unit cost?

• Diseconomies of scale

• Increased unit cost

• Economies of scale

• Reduced market presence

Which method of growth involves a business allowing others to trade under its name?

• Outsourcing

• Franchising

• Mergers

• Takeovers