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WorksheetsLO5 Business Growth
Total questions: 74
Worksheet time: 37mins
Which of the following is a component of internal growth?
Mergers
Developing new products
Joint Ventures
Takeovers
What is an example of external growth?
Updating current products
Entering new markets
Mergers
Geographical Expansion
Which of the following is related to efficiencies and costs?
Economies of Scale
Geographical Expansion
Joint Ventures
Sensitivities
What is a challenge of growth mentioned in the checklist?
Developing new products
Additional Human Resource Requirements
Mergers
Economies of Scale
What is internal growth in a business context?
Expanding by acquiring other companies
Expanding using its own resources
Reducing the workforce to cut costs
Outsourcing production to other countries
Which of the following businesses is known for expanding by offering new products or services?
Dyson
McDonald's
Red Bull
Why do businesses aim to grow internally?
To reduce their market share
To attract more customers and become more successful
To decrease their product range
To limit their resources
What is one way a business can grow according to the text?
By reducing product prices
By developing new products
By hiring more employees
By closing old branches
What can developing new products lead to, as mentioned in the text?
Decreased market competition
Reduced customer base
Increased revenue and profitability
Lower product range
What is an example given in the text for a company expanding internally?
Apple creating a new product combining iPhone and iPad features
Samsung reducing the price of the S22
Microsoft launching a new software update
Google opening a new office
What is one method a company can use to retain customers and maintain market share?
Lowering product prices significantly
Updating the design or features of existing products
Increasing advertising budget
Expanding to new markets
Which of the following is an example of updating a product to make it more appealing?
Changing the color of a product
Updating the fabric or design of a popular shirt
Reducing the size of a product
Increasing the price of a product
What is one potential benefit of updating current products?
Decreasing production costs
Retaining customers
Reducing product lifespan
Increasing product weight
Why can it be risky for a business to enter a completely new market?
It guarantees immediate success.
It involves high costs and uncertainty.
It always leads to increased competition.
It ensures a stable customer base.
During the Covid lockdowns, why did a company that specialized in high-end customized indoor furnishings switch to selling more affordable furniture online?
To increase footfall in physical stores.
To adapt to changing market demands.
To reduce production costs.
To focus on luxury products.
What is geographical expansion in business?
Expanding into new geographical areas
Increasing product variety
Reducing operational costs
Hiring more employees
Which of the following is a benefit of geographical expansion?
Decrease in market share
Greater economies of scale
Increased operational costs
Limited customer base
What is a risk associated with geographical expansion?
Decreased marketing needs
Lack of customer knowledge in new locations
Reduced need for new premises
Immediate income increase
What might a company need to do when expanding geographically?
Reduce staff
Increase marketing efforts
Limit product offerings
Decrease production
What is external growth in business?
Expanding by using another business's resources
Increasing production within the company
Hiring more employees
Reducing costs by cutting expenses
Which of the following is a method of external growth?
Mergers
Internal promotions
Product development
Cost reduction
What is a merger?
When two companies combine to form one
When a company buys another company's products
When a company hires new staff
When a company reduces its workforce
What is a takeover in business terms?
A new company formation
One company purchasing another
A merger of two companies
A company going public
What is a horizontal takeover?
Taking over a supplier
Taking over a manufacturer
Taking over a similar organization
Taking over a different industry
What is vertical integration?
Buying a competitor
Buying a supplier or manufacturer
Merging with a similar company
Expanding into a new market
What was the purpose of Sainsbury's acquisition of Argos in 2016?
To reduce costs
To expand its product range and reach new customers
To enter a new industry
To close Argos stores
What type of takeover occurs when a local grocery shop buys another grocery shop on the same street?
Vertical
Horizontal
Diagonal
Lateral
When a tour operator specializing in coach holidays buys a coach company, what type of takeover is this?
Vertical
Horizontal
Diagonal
Lateral
If a shoe manufacturer buys a shoelace company, what type of takeover is it?
Vertical
Horizontal
Diagonal
Lateral
What type of takeover is it when a furniture shop expands by buying all the furniture shops in the next town over?
Vertical
Horizontal
Diagonal
Lateral
An airline buying another airline operating from the same airport is an example of which type of takeover?
Vertical
Horizontal
Diagonal
Lateral
What is a joint venture?
A single company expanding its operations
Two or more companies working together on a specific project
A company buying out another company
A company going public
What is one benefit Starbucks gained from its joint venture with PepsiCo?
Access to Pepsi's brand name
Access to Pepsi's distribution network and marketing
Ownership of PepsiCo
Control over Pepsi's product line
What is one benefit PepsiCo gained from its joint venture with Starbucks?
Ownership of Starbucks
Access to Starbucks' coffee recipes
Access to Starbucks' strong brand name in the coffee industry
Control over Starbucks' stores
What type of products are involved in the Starbucks and PepsiCo joint venture?
Freshly brewed coffee
Bottled and canned beverages
Coffee beans
Bakery items
Which company is an example of a business that grows externally by using a range of methods?
Starbucks
PepsiCo
TUI
Coca-Cola
How many ways can a business or enterprise grow externally?
One
Two
Three
Four
Name one advantage of a merger.
Increased competition
Reduced market share
Economies of scale
Higher costs
Name one disadvantage of a joint venture.
Shared risks
Increased control
Full ownership
Reduced collaboration
What are the two different types of a business takeover?
Hostile and friendly
Aggressive and passive
Direct and indirect
Voluntary and involuntary
If a marketing company and a technology company came together to launch a new phone, what type of partnership would it be?
Merger
Acquisition
Joint venture
Franchise
What are economies of scale?
Cost savings achieved by increasing production scale
Increased costs due to business expansion
Decreased efficiency in large businesses
Higher prices for bulk purchases
Which of the following is a type of economy of scale related to buying raw materials in bulk?
Managerial
Technical
Purchasing
Marketing
How can larger businesses benefit from financial economies of scale?
By hiring more managers
By accessing lower interest rates
By using advanced machinery
By increasing advertising costs
What advantage do larger businesses have in marketing economies of scale?
They can hire more specialized managers
They can achieve cost savings in advertising
They can buy raw materials at higher prices
They can reduce the number of employees
If Rosie wanted to re-fit all the shops, which economy of scale would help her do this and why?
Financial economies of scale
Technical economies of scale
Marketing economies of scale
Managerial economies of scale
Rosie wants everyone to know about a new gingerbread unicorn biscuit she is introducing. Which economy of scale would help her do this and why?
Marketing economies of scale
Financial economies of scale
Technical economies of scale
Purchasing economies of scale
Rosie has been considering opening even more bakeries in France. Which economy of scale would help her figure out if this is a good idea?
Risk-bearing economies of scale
Technical economies of scale
Financial economies of scale
Managerial economies of scale
Rosie currently uses 10 different suppliers for her flour. Which economy of scale would help her to reduce this cost?
Purchasing economies of scale
Marketing economies of scale
Technical economies of scale
Financial economies of scale
What other ways could Rosie have grown her business externally other than through a takeover?
Mergers
Internal growth
Franchising
Joint ventures
What are diseconomies of scale?
Decreasing costs as a business grows
Increasing costs as a business grows beyond a certain size
Costs remaining constant regardless of business size
Costs decreasing due to improved technology
Which of the following is a type of diseconomy of scale?
Innovation
Control
Marketing
Research
What challenge is associated with coordination as a business grows?
Easier decision-making
Reduced errors
Delays and errors in aligning efforts
Increased profits
How does communication become affected as a business grows?
It becomes simpler and more efficient
It remains unchanged
It becomes more complex and difficult
It leads to fewer misunderstandings
What issue is Rosie facing with her main supplier?
The supplier is delivering too early.
The supplier is charging late ordering fees.
The supplier is providing extra goods.
The supplier is offering discounts.
What complaint do customers have about Rosie's cakes?
The cakes are too sweet.
The cakes are not as good as they used to be.
The cakes are too expensive.
The cakes are too small.
What is one impact of business growth on customer service?
Staff may become more polite.
Deliveries may be faster.
Complaints may not be handled effectively.
Goods may be of higher quality.
What is a potential benefit of economies of scale for businesses?
Increased costs
Reduced efficiency
Increased profitability
Decreased competitiveness
What can happen if a business grows too quickly without effective management?
Economies of scale
Diseconomies of scale
Increased profitability
Improved efficiency
Which of the following is an example of diseconomies of scale related to coordination?
A brewery's ordering system not meeting demand
A landscaping company delivering to wrong addresses
A fast-food business running out of ice cream
Two taxi businesses needing a new taxi rank
What is an example of economies of scale: financial?
Needing a new taxi rank after a merger
Delivering gravel to wrong addresses
Running out of ice cream due to order errors
Expanding a brewery without meeting demand
What is a potential risk of business expansion?
Increased profits
Guaranteed success
Reluctance to invest
Lower competition
Why might a smaller business be at a disadvantage compared to larger businesses?
They have more resources
They can set lower prices
They have economies of scale
They have better customer service
What should businesses consider regarding additional physical resource requirements when expanding?
Employee satisfaction
Suitable premises within budget
Marketing strategies
Product development
What is an important factor related to additional human resource requirements?
Availability of local training
Cost of new products
Marketing strategies
Customer feedback
What should businesses be aware of regarding local cultural sensitivities?
Local legislation
Employee training
Local opposition to industrial growth
Transport links
Why is understanding local legislation important for expanding businesses?
To improve product quality
To find suitable premises
To be aware of incentives for new businesses
To train employees
What are physical resource requirements for a business?
Intangible assets like brand reputation
Tangible assets like buildings and equipment
Financial resources like cash flow
Human resources like employees
Why might a business need more buildings as it grows?
To increase its brand value
To accommodate more employees
To reduce operational costs
To improve customer service
What might a growing business need to upgrade to keep up with demands?
Office furniture
Marketing strategies
Technology systems
Employee uniforms
Which of the following is NOT a physical resource requirement?
Equipment
Technology
Raw materials
Customer feedback
When did the bicycle shop first open its doors?
1990
1995
2000
2005
What new product did the bicycle shop start offering two years ago?
Mountain bikes
Electric bikes
Road bikes
Children's bikes
Why do the owners believe it is time to update all the systems in the warehouse?
To reduce costs
To improve customer service
Because the business has grown
To change the shop's location
