WorksheetsBusiness Growth
Total questions: 25
Worksheet time: 13mins
Internal growth is also known as
Merger
Sales maximisation
Organic growth
Inorganic growth
External growth is also known as
Organic growth
Inorganic growth
Merger
Sales maximisation
An example of Organic growth is
Merger
Launching new products
Acquisition
Takeover
The possible benefits of growing the business are
Keeping control over decision making
Larger potential profits
Benefit from bulk buying discounts
Security for the future of the business
A merger is
Two business agreeing to becoming one new business
One business buying shares in another business
One business taking over control of another business
Two businesses co operating with each other.
The disadvantages of Organic growth are
There is little or no risk in growing slowly
This is a very high risk strategy, opening lots of stores or taking on new staff is very risky
Long period between investment and return on investment
Growth may be limited and is dependent on reliability of sales forecasts
Advantages of a Merger might be
Better deals because of increased order size, bulk-buying discounts etc.
Increased revenue and market share. Increased size of the combined company increases market power and ability to set higher prices
To gain resources. If one company has resources (e.g. technology) that another one wants then a merger may be the most cost effective way to get access to those resources
Slow growth so can be easily managed
Disadvantages of Mergers could be
Clash of Cultures. All businesses have a slightly different culture and they may not work well together
Mergers lead to bigger more efficient business
Possible communication problems. As the business gets bigger, or if there are now too many employees
Unreliable partners. A good merger will depend on trust between the businesses
Which option best describes the term takeover?
When two firms agree to join together to make one new business
When a business finds a new market in another country
When one business purchases another business
When a business brings something new to the market
Which best describes growth by expanding overseas? When a business:
Finds new customers to buy its products in its domestic market
Purchases another business in its home country
Finds a new market in another country
Invests heavily in research and development
Which two are examples of organic growth?
When two businesses agree to join together
When a business expands overseas
When a business acquires a controlling interest in another business
When one business buys another business
When a business launches a new product
Nike buying a materials producer would be a form of...
Vertical Forward Integration
Horizontal Integration
Vertical Backward Integration
Diversification
Nike buying a materials producer would be a form of...
Vertical Forward Integration
Horizontal Integration
Vertical Backward Integration
Diversification
Two toy companies decide to merge because they believe they will be able to develop more ideas for new toys and produce and sell them faster, at lower costs.
Horizontal
Vertical
Conglomerate
Which is a franchisor?
Allows others to use their brand and business for a fee
Takes over a business
Buys into an existing brand
Fee paid from franchisee to franchisor based on percentage of sales
royalty fee
license fee
advertising fee
Which is a franchisee?
Provides financing to a business
Takes over a business
Buys into an existing brand and proven business
A franchisor offers lots of training to the new franchisee
True
False
A franchisor uses the money received from franchisee to pay for advertising and marketing materials
True
False
Benefits of owning a franchise business
Proven business model
Easier to get financing
Protected territory
All of the Above
A franchisor expands the brand by using other people's money
True
False
A franchisee can operate a business anywhere they want and are not restricted by territory
True
False
A Franchise business model is used only in the food industry
TRUE
FALSE
Financing may be easier to obtain when buying a Franchise
TRUE
FALSE
