2.1: Growing the business

Question 1

What is internal growth

Answer 1

When a business expands by itself

Question 2

What are some methods of internal growth

Answer 2

• Changing marketing mix
• Expansion overseas
• New products
• Research
• New technology

Question 3

What is external growth

Answer 3

When a business grows by joining with another

Question 4

What are some benefits of being a Public Limited Company

Answer 4

• Can raise lots of finance through share capital
• Limited liability
• Prestige and reliablity
• Suppliers may be willing to pay less
• Greater public awareness

Question 5

What are some drawbacks to being a PLC

Answer 5

• Complex to set up & run
• Takeovers
• Increased media attention->less privacy & higher focus on ethics
• Less financial privacy
• Shareholders have a large influence on decisions

Question 6

What are some pros of selling assets

Answer 6

• Convenient
• Relatively quick
• Makes space for more profitable assets

Question 7

What are some cons of selling assets

Answer 7

• risky
• assets may have depreciated (selling price has fell)
• May be tricky to sell old equipment

Question 8

What factors can affect objectives

Answer 8

• Performance
• Leadership
• Culture
• Market
• Competition
• Technology
• Legislation

Question 9

What are some potential objectives for a flourishing business

Answer 9

• Expand product range
• Enter new market
• Up sales/profits/market share
• Takeover
• Open new branches
• Grow workforce

Question 10

What are some potential objectives for a struggling business

Answer 10

• reduce product range
• Exit markets
• Achieve enough sales
• Improve efficiency
• Maintain market share
• Reduce costs

Question 11

What are ethics

Answer 11

The moral principles that guide our behaviours

Question 12

What are some ethical behaviours

Answer 12

• Fair treatment of workers/suppliers
• Honestly
• Ethical sourcing
• Community investment
• Following legislation
• Sustainability

Question 13

How can business impact the environment

Answer 13

Short-term:
* Congestion through deliveries
* Pollution by manufacturing
Long-term:
* Climate change
* Resource depletion

Question 14

How can businesses reduce environmental impacts

Answer 14

• Recycling
• Renewable energy
• Conserving resources
• Biodegradable packaging
• Reducing food miles

Question 15

What is globalisation

Answer 15

Where business operate internationally and gain a lot of influence

Question 16

What are multinationals

Answer 16

Large companies with facilities/markets worldwide

Question 17

What are some benefits of globalisation

Answer 17

• New market opportunities
• Access to tech and resources
• Cheaper labour

Question 18

What are some drawbacks of globalisation

Answer 18

• Threat from foreign competition
• Challenge of adapting products to meet foreign customer needs
• Multinationals are very powerful

Question 19

What is protectionism

Answer 19

When governments try to protect local firms by discouraging foreign competition

Question 20

What are some methods of protectionism/trade barriers

Answer 20

• Tariffs (import taxes)
• Quotas (physical limits)
• Subsidies (money to help domestic businesses)
• Trade blocs (groups of countries that promote trade amongst themselves)

Question 21

What are some reasons to set up trade barriers

Answer 21

• Protecting local jobs
• Protecting emerging industries
• Stopping undesirable goods entering
• Raising government revenue (tariffs)
• Higher demand for domestic goods

Question 22

What is glocalisation

Answer 22

Changing a product in order to adapt to the preferences and laws of other countries