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WorksheetsGrowth of Business and Industry
Total questions: 26
Worksheet time: 32mins
Why might a business want to grow?
To gain more competition
To increase market share
To reduce the amount of stores
How could we measure the size of a Business?
Charity fundraising
Quality of their adverts
Sales revenue
How much they spend on advertising
Market share is the _________________ of the market that you control.
proportion
propulsion
quality
customers
weight
A definition of Economies of scale is :-
A reduced unit cost gained from an increase in production
Increasing your turn over through reducing your sales prices
Taking over suppliers
Diversifying by launching new products
Three things that might hold back a company's ability to grow are :-
Increasing demand for their products
Restricted funds
Being a Private Limited Company
Limited skills and experience
Proprietors are happy with their current lifestyle
Which of these is not a type of Economy of Scale?
Managerial
Technical
Marketing
Purchasing
Public relations
What is reduced by Economies of Scale
Total production Costs
Total sales Revenue
Unit costs
Salary paid to employees
In which of the following circumstances might a business be experiencing economies of scale?
Falling revenue, increasing unit costs
Increasing revenue, increasing unit costs
Increasing revenue, falling unit costs
Falling revenue, falling unit costs
Which of the following is NOT a method of internal (organic) growth?
Increasing output
Gaining new customers
Developing new products
Merging with / taking over another business
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
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 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
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
Which method of growth carries more risk?
Internal/Organic
External/Inorganic
Which of the following is NOT Internal/organic growth?
Opening a new location
Expanding through internet selling
Merging with a similar company
Offering franchises
A merger is...
A method of Internal growth
A friendly deal where two businesses join together
A forced and sometimes hostile deal where one firm buys a share of the other business
A take-over is...
A method of Internal growth
A friendly deal where two businesses join together
A forced and sometimes hostile deal where one firm buys a share of the other business
Vertical integration occurs when...
firms in the same industry and at the same stage of the production process combine to form a larger business.
when a firm expands by combining with an existing business in the same industry but at a different stage of the production process.
Involves take over or merger with another firm in an unrelated industry.
HORIZONTAL integration occurs when...
firms in the same industry and at the same stage of the production process combine to form a larger business.
when a firm expands by combining with an existing business in the same industry but at a different stage of the production process.
Involves take over or merger with another firm in an unrelated industry.
BMW Purchasing the MINI is an example of....
Vertical integration
Horizontal Integration
Conglomerate Integration
Apple buying a company that creates microchips for phones and computers is an example of...
Backward Vertical integration
Horizontal Integration
Conglomerate Integration
Forward Vertical Integration
Mcdonalds buying a cattle farm would be an example of...
Backward Vertical integration
Horizontal integration
Diversification
Forward Vertical integration
A horizontal merger is likely to reduce
diseconomies of scale
economies of scale
competition
company revenue
A vertical backwards takeover
Allows the company to control its customers
Increases competition in the market
Provides the company with more security of supply
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 merger partners A good merger will depend on trust between the businesses
