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Qualifications Edexcel GCSE Business

2.1 Growing the business

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What is a common method of organic growth for a business?
Launching new products
Which of the following is a measure of the size of a business?
Revenue
What is an advantage of external growth such as a merger or takeover?
It provides quick access to new markets
What could be a disadvantage of a merger for a company?
It may lead to a clash of corporate cultures
What is a key reason for businesses to pursue organic growth?
To maintain control and steadily increase market presence
What impact does issuing new shares have on a Public Limited Company?
It can dilute the value of existing shares
Why might a business sell assets to fund growth?
To quickly raise finance without incurring debt
What is a potential disadvantage of using loan capital to fund business growth?
Interest payments can be costly
How can entering new markets contribute to a company's growth?
By accessing a broader customer base
What is an example of using technology for product improvement?
Improving smartphone camera quality
Why might a business choose to grow through innovation and R&D?
To stay competitive by offering new and improved products
What are internal sources of finance for business growth?
Retained profit
Selling assets
Why might a company prefer internal sources of finance for growth over external sources?
To avoid debt
To retain control
What is a benefit of external growth such as takeovers for a company?
Rapid expansion and access to new resources
Why is organic growth considered less risky than external growth?
It allows for steady expansion without overextending resources
What could be a challenge of growing a business through new markets?
Adapting product strategies to fit cultural preferences
What is a primary aim for a new start-up business?
Survival
Which factor might cause a business to change its objectives?
Changing market conditions
How might a change in consumer lifestyles affect a business's market?
Increasing demand for health and wellness products
What is an example of using technology to achieve business growth?
Introducing an online ordering system
Why might a business decide to focus on survival rather than growth?
Due to poor performance in a competitive market
What could be a reason for a business to enter a new market?
To diversify its product offerings
How can legislative changes impact a business's objectives?
Requiring adjustments to product packaging to reduce waste
What internal reason might prompt a business to shift its focus towards environmental issues?
Increased awareness of corporate social responsibility
How might exiting a market change a business's objectives?
Entering a new market may focus on cost reduction
What change in business objectives might occur due to poor business performance?
Shifting from growth to survival or cost-cutting measures
How might technological advancements prompt a business to change its product range?
Incorporating new features into existing products
What is a potential impact of market condition changes on a business's objectives?
Adjusting the marketing mix to better meet consumer demands
Why might a business choose to reduce its product range?
To eliminate underperforming products and focus on more profitable items
In response to new legislation, how might a business's aims and objectives change?
Focusing on sustainability and reducing environmental impact
How does entering an overseas market affect a business's objectives?
Aiming to establish brand recognition in a new geographical area
What objective might a business have when focusing on growth through technology?
Enhancing product features to stay ahead of competition
Why might a business need to change its aims due to internal reasons?
Shift in leadership vision or company culture
What could be a reason for a business to grow its workforce?
Expansion into new markets requiring additional staff
How might changes in consumer trends impact a business's product development objectives?
Shifting focus towards products that meet the new consumer preferences
What is globalisation?
The process of increasing interconnection through trade
Which of the following is a reason for globalisation?
Improvements in transport and communication
What is a positive impact of globalisation?
Foreign companies bring jobs and income into the country
What are imports?
Goods or services bought from abroad
Why might a business import raw materials rather than sourcing domestically?
Cheaper costs and improved competitiveness
What is an export?
Goods and services produced in one country and sold abroad
How can exporting goods and services benefit a UK business?
Increases potential sales
What is a barrier to international trade?
Tariffs on imports
Why would a government impose tariffs on imports?
To protect domestic industries from foreign competition
What is a trade bloc?
A group of countries that promote trade between its members
How does e-commerce help businesses compete internationally?
Reaches potential customers anywhere in the world
What impact does globalisation have on business location decisions?
Businesses may move production to countries with lower costs
What characterises a multinational company?
Owns or controls production in more than one country
What is one potential negative impact of globalisation?
It can drive out domestic businesses due to greater foreign competition
How might globalisation lead to changes in a business’s product range?
Adapting products to meet diverse global market demands
Why are trade blocs formed?
To encourage trade between member countries and reduce barriers
How does international competition affect domestic firms?
May undercut domestic firms, causing business closures
What strategy might a business use to adapt to globalisation?
Changing the marketing mix to suit international markets
What constitutes ethical behaviour in business?
Acting in ways considered moral, fair, and honest by stakeholders
How can a firm be ethical and still remain profitable?
By using high-quality materials and providing good customer service
How does ethical behavior serve as a marketing tool for businesses?
Attracts customers who value ethics over cost
What environmental impacts does business activity have?
Pollution
Damage to sites
Use of natural resources
How can sustainable growth be achieved without compromising future needs?
By using renewable resources
How does the marketing mix change in response to pressure group actions?
Adapting product offerings to meet ethical and environmental standards
Why do pressure groups exist?
To influence consumer, government, and business behavior towards issues
How can environmental marketing promote a business?
By attracting customers willing to pay more for eco-friendly products
What challenges do businesses face when balancing environmental considerations with profit?
Managing higher costs associated with sustainable practices while maintaining competitive pricing
Why is it important for businesses to consider both ethical and environmental factors in their operations?
To ensure sustainability, stakeholder satisfaction, and long-term success