WorksheetsIGCSE Business (0264)- 1.3.3 Business Growth Quiz
Total questions: 25
Worksheet time: 8mins
Growth can allow a business to:
Spread risk by diversifying products
Increase influence over suppliers
Improve brand recognition
All of the above
A key reason why some owners aim for business growth is to:
Increase the need for external financing
Gain personal satisfaction and prestige
Avoid employing more workers
Reduce decision-making power
An entrepreneur may wish to grow their business to:
Limit their brand exposure
Reduce customer base
Secure long-term survival
Avoid innovation
Internal (organic) growth occurs when a business:
Buys another business
Expands using mergers
Uses its own resources to grow
Is taken over by competitors
An example of internal growth is:
Acquiring a competitor
Opening a new branch in a city
Merger with a supplier
Horizontal integration
Developing new products allows a business to:
Reduce customer loyalty
Increase sales from existing customers
Avoid research costs
Prevent market expansion
Why might a business enter new markets?
To spread risk
To increase customer base
To achieve higher sales
All of the above
Which of the following is an advantage of internal growth?
Control remains with the current owners
Growth is often very quick
Requires no investment
Avoids all risk
External growth happens when a business:
Expands production in its current factory
Introduces a new product line
Joins with or buys another business
Expands into a new country alone
Horizontal integration means:
Merging with a supplier
Taking over a business in the same industry and same stage of production
Buying a business in a different industry
Merging with a retailer
Vertical integration occurs when:
Two competitors in the same market join
A business merges with another at a different stage of the supply chain
Firms in different industries combine
A business expands into unrelated markets
Forward vertical integration is when a manufacturer:
Merges with a raw material supplier
Merges with a distributor or retailer
Joins with a competitor
Expands internationally
Backward vertical integration might involve:
A car manufacturer buying a tire company
A supermarket buying a competitor
A clothing brand opening new shops
A bank merging with another bank
A benefit of internal growth is:
Lower risk of culture clash
Quicker than mergers
Doesn’t require investment
Reduces market share
A disadvantage of external growth is:
Quicker access to new markets
Risk of culture clash
Increased competitiveness
Stronger market position
Why might horizontal integration be beneficial?
Spreads risk into new industries
Increases economies of scale
Gives control of distribution
Allows faster innovation
Which is a potential problem with vertical integration?
Access to supply chain
Control over quality
Lack of expertise in the new sector
Stronger customer loyalty
One risk of mergers is:
Shared resources
Higher efficiency
Management conflict
Lower market power
A common problem of rapid growth is:
Better employee relations
Finance shortages
Lower costs
Stronger brand image
A growing business may face problems because:
Co-ordination and control is more difficult in a larger organization
There are more promotion opportunities for employees
Communication becomes easier
Workers will expect higher wages
Some businesses deliberately remain small because:
They wish to serve niche markets
They lack motivation to grow
They always lose money
Laws prevent expansion
A key advantage of staying small is:
Easier communication and flexibility
Greater access to finance
Stronger economies of scale
Wider geographic reach
Why might a family-owned restaurant choose to remain small?
To earn greater status and prestige
To provide personalised customer service
To increase bureaucracy
To benefit from economies of scale
Which of the following is not a reason some businesses remain small?
Niche market focus
Desire to maintain control
Easier decision-making
Access to economies of scale
Some entrepreneurs avoid growth because:
It reduces risk
They prioritise work-life balance
It guarantees more market share
It lowers costs automatically
