Business Competition and Growth Strategies

The video discusses the growth of businesses, highlighting the advantages large firms have over smaller rivals, such as economies of scale and the ability to influence market prices. It explains methods of expansion, including internal growth, mergers, and franchising. The video also addresses the risks and dilemmas business owners face when deciding whether to expand, emphasizing the potential drawbacks of staying small.

What is one major advantage large firms have over smaller rivals?

• They can set higher prices.

• They have less competition.

• They have fewer employees.

• They have more influence over market price.

How do economies of scale benefit large firms?

• By increasing their marketing costs.

• By decreasing their sales volume.

• By allowing them to buy raw materials at higher prices.

• By reducing their unit costs.

What is one method of internal growth for a business?

• Reducing its product line.

• Merging with another company.

• Hiring more staff and equipment.

• Leasing its idea to franchisees.

Which of the following is an example of external growth?

• Increasing production capacity.

• Merging with another organization.

• Hiring additional staff.

• Opening new branches.

What is franchising in the context of business expansion?

• A strategy to reduce costs.

• A method of internal growth.

• A technique to decrease market share.

• A way to lease business ideas to franchisees.

What is a potential risk of business expansion?

• Guaranteed increase in profits.

• No change in market position.

• Possibility of expansion plans failing.

• Immediate success in new markets.

What dilemma do business owners face regarding expansion?

• Whether to increase prices.

• Whether to reduce staff.

• Whether to expand or remain small.

• Whether to decrease production.

Why might some business owners choose not to expand?

• To compete with larger firms.

• To avoid the risk of losses.

• To increase their market share.

• To reduce their product quality.

What is a drawback of avoiding growth for small businesses?

• They have more market influence.

• They enjoy economies of scale.

• They face cost disadvantages.

• They can set lower prices.

How can small businesses compete with larger rivals?

• By increasing their marketing costs.

• By offering better service or quality.

• By reducing their product range.

• By setting lower prices.