2.1.1 Business growth

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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

2.1.1 Business growth

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