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Worksheets3.1.2 Business Growth
Total questions: 22
Worksheet time: 11mins
Expanding the business by introducing new product lines is an example of what type of growth?
Internal growth
External growth
What growth type when a business grows using its own resources to increase scale of its operations?
Vertical
External
Organic
Lateral
Dyson started by selling vacuum cleaners...they now sell hand dryers, washing machines, and fans. Which type of business growth is this an example of?
Internal (organic) growth
External growth
The first Tesco store was built in London in 1929. Tesco have since opened stores all across the UK and in other countries. Which type of business growth is this?
Internal (organic) growth
External growth
When two firms agree to integrate their operations called ________
Merger
Acquisition
Firm buys a controlling or 100% interest in another firm called _______
Merger
Acquisition
Kraft took over Cadbury in 2010. Which type of business growth is this an example of?
Internal (organic) growth
External growth
Which of the following is not the reason for acquisition?
Increase market power
Overcoming entry barriers
Increase diversification
Building up brand image
Which of the following is an example of a horizontal merger/takeover?
A chocolate producer buys another chocolate producer
A chocolate producer buys a cocoa farm
A chocolate producer buys a chain of coffee shops
A chocolate producer buys a car producer
Name the type of integration. A major producer of automobiles buys a large rental car company...
Horizontal
Vertical forwards
Conglomerate
Vertical backwards
Name the type of integration. A life insurance company merges with a major telecommunications company...
Horizontal
Vertical forwards
Conglomerate
Vertical backwards
Name the type of integration. A large producer of business and personal computers buys a company that produces computers for the home market...
Horizontal
Vertical backwards
Conglomerate
Vertical forwards
Name the type of integration. A natural gas producer buys a company that owns natural gas pipelines that transport gas to major urban areas...
Horizontal
Vertical forwards
Conglomerate
Vertical backwards
Name the type of integration. An automobile manufacturer that buys a football team...
Horizontal
Vertical forwards
Conglomerate
Vertical backwards
When a company expands by purchasing and controlling the direct distribution or supply of its products
Horizontal integration
Vertical backward integration
Vertical forward integration
Conglomerate integration
Which of the following best describes the term 'diversification'?
To join with a business in the same industry as you
To join with a business that can supply you with raw materials
To join with a business that sells something similar to you
To join with a business in a completely unrelated industry
As businesses grow in size, they usually benefit from 'economies of scale' - what does this mean?
Lower total costs
Lower average costs per unit
Higher total costs
Higher average costs per unit
Which of the following is NOT a benefit to mergers and acquisitions?
Greater market share
Synergy
Diversification
Redundancies
Some mergers / takeovers in the UK are blocked by the government (CMA). This is because mergers / takeovers can lead to a lack of choice for consumers. A lack of competition between businesses in a market could lead to...
Lower prices and better customer service
Higher prices and worse customer service
Two or more businesses pooling their resources and creating a separate entity to achieve a goal:
Joint Ventures
Mergers
Acquisitions
Franchising
Joint ventures have advantages including all of these EXCEPT
Culture clash
Spreading of costs and risks
Entry to foreign markets
Competitive advantage
If a business currently has sales of £250,000 in a market worth £2 million, what is it's market share?
10%
12.5%
17.5%
25%
