Question 1: Define business growth in your own words and explain two reasons why a business might aim to grow.

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

Question 2: List three internal methods a business could use to achieve growth.

Answer: Internal methods include increasing sales through marketing, expanding product lines, and improving efficiency to reduce costs.

Question 3: Describe two external methods a business might use to grow.

Answer: External methods include acquiring or merging with other businesses, and entering new markets or geographical areas.

Question 4: Sketch a simple diagram showing the difference between organic growth and inorganic growth. Label each part clearly.

Answer: A correct sketch would depict two separate processes: one illustrating organic growth with arrows showing expansion through sales, new products, or market penetration; the other showing inorganic growth with arrows representing mergers or acquisitions.

Question 5: Explain two potential risks associated with rapid business growth.

Answer: Risks include overextending resources which can lead to financial difficulties, and losing control of quality or company culture.

Question 6: A company has decided to grow by acquiring a competitor in a different country. List two advantages and two disadvantages of this strategy.

Answer: Advantages: Increased market share and access to new customer bases. Disadvantages: High costs and potential cultural or legal challenges in the new market.

Question 7: Draw a flowchart showing the steps a business might take to expand into a new international market.

Answer: A correct flowchart would include steps such as market research, selecting a market, developing a marketing strategy, establishing distribution channels, and launching products.

Question 8: Identify and explain one benefit and one challenge of business diversification as a growth strategy.

Answer: Benefit: Reduces dependency on a single product or market, spreading risk. Challenge: Managing unfamiliar markets or products can be complex and costly.

Question 9: Explain how technological advancements can support business growth.

Answer: Technological advancements can improve efficiency, enable new products or services, and help reach more customers through digital marketing.

Question 10: Discuss why a business might choose to grow gradually rather than rapidly.

Answer: Gradual growth allows for better management of resources, reduces risks, and ensures quality is maintained while expanding.