Understanding Business Growth Strategies

What is internal (organic) growth in a business context?

• Growth through mergers and acquisitions

• Growth by increasing sales of existing products

• Growth by franchising

• Growth by reducing competition

Which of the following is a method of external growth?

• Increasing advertising

• Launching new products

• Mergers and takeovers

• Selling more in existing markets

What is a key advantage of operating as a franchisor?

• High initial investment

• Limited control over franchisees

• Rapid expansion with lower capital risk

• Increased competition

Which of the following is a disadvantage for a franchisee?

• Access to established brand

• Limited creative control

• Support from franchisor

• Lower risk of business failure

Why might a business choose to remain small?

• To increase competition

• To benefit from internal economies of scale

• To maintain personal control and flexibility

• To diversify into new markets

Which of the following is a benefit of diversifying?

• Increased dependency on a single market

• Spreading risks across different markets

• Higher costs of production

• Reduced market share

What is a key feature of a franchise model?

• The franchisee owns the brand

• The franchisor provides the business model

• The franchisee has complete independence

• The franchisor has no control over operations

Which method of growth involves selling more of current products in existing markets?

• External growth

• Franchising

• Internal (organic) growth

• Diversification

Which of the following is a reason for a business to grow?

• To reduce market share

• To increase competition

• To improve market share

• To decrease profit

What is a disadvantage of being a franchisor?

• Limited brand recognition

• High control over franchisees

• Potential damage to brand reputation

• Rapid expansion