business growth application

Question 1

Reasons for demergers application

Answer 1

Focus on core operations
→ Lloyds TSB split in 2013 — became Lloyds Bank and TSB to improve focus and efficiency.

Avoid regulation
→ Post-2008 financial crash, Royal Bank of Scotland was forced to sell off assets.

Raise funds
→ Whitbread sold off Costa Coffee to Coca-Cola (£3.9bn) to focus on Premier Inn hotels.

Question 2

Organic growth examples

Answer 2

→ Greggs opened over 2,000 UK outlets by slowly reinvesting profits rather than merging.
→ JD Sports expanded internationally and boosted sales through online investment.

Question 3

horizontal integration

Answer 3

→ Sainsbury’s tried to merge with Asda in 2019 — would’ve created UK’s largest supermarket chain. Blocked by the CMA due to reduced competition.
→ T-Mobile and Orange UK merged to form EE, dominating telecoms.

Question 4

vertical integration application

Answer 4

Backward: Tesco Farms for supply chain control in produce & meat.