Question 1: Define the term 'business growth' and explain two reasons why a business might want to grow.

Answer: Business growth refers to an increase in the size, revenue, or market share of a company over time. Reasons for growth include increasing profits and gaining a competitive advantage in the market.

Question 2: List and briefly describe two internal methods a business can use to achieve growth.

Answer: Internal methods include: 1) Increasing sales through marketing and promotional activities. 2) Developing new products to attract more customers and expand the product range.

Question 3: List and briefly describe two external methods a business can use to achieve growth.

Answer: External methods include: 1) Mergers and acquisitions to quickly increase market share. 2) Franchising to expand the business into new locations using existing business models.

Question 4: Identify and explain two potential benefits of business growth.

Answer: Benefits include: increased revenue and profits, which can lead to greater market influence and financial stability for the business.

Question 5: Identify and explain two potential disadvantages or risks associated with business growth.

Answer: Risks include: overextension of resources, which can lead to financial difficulties, and dilution of quality if the business expands too quickly without adequate planning.

Question 6: Imagine a local bakery decides to expand by opening a new branch in a nearby town. Describe two challenges they might face during this expansion.

Answer: Challenges may include: finding suitable premises and attracting enough customers in the new location, and managing increased operational costs such as staffing and supplies.

Question 7: Sketch a simple diagram illustrating the concept of organic growth in a business. Label the key stages involved.

Answer: A correct sketch would show a business at the center with arrows pointing outward to represent increased sales, new product development, and market penetration, with labels for each stage.

Question 8: Explain how a merger differs from a takeover, and give one advantage of each.

Answer: A merger is a mutual agreement between two businesses to combine as equals, whereas a takeover involves one business acquiring another without mutual consent. Advantages of a merger include shared resources; advantages of a takeover include quick expansion.

Question 9: Draw a basic flowchart showing the typical steps a business might take when planning to expand externally through franchising.

Answer: A flowchart should include steps such as: researching franchise opportunities, developing a franchise model, recruiting franchisees, providing training/support, and opening new franchise outlets.

Question 10: Discuss two ethical considerations a business should take into account when expanding rapidly into new markets.

Answer: Considerations include ensuring fair treatment of new employees and franchisees, and avoiding aggressive sales tactics that could mislead customers or harm the business’s reputation.