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GCSE Business Studies TOPIC 1 > 1.7 - Expanding A Business > Flashcards

1.7 - Expanding A Business Flashcards

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1
Q

Internal growth

A

By selling more of its own products

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2
Q

External growth

A

By joining with another business

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3
Q

Market capatilisation

A

A way of measuring the size of a business

Formula: market price of share x the number of shares

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4
Q

Franchise

A

A franchise occurs when a franchiser sells the rights to its products to a franchise, usually in return for a fee and percentage of turnover

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5
Q

Franchisee

A

A franchisee buys a franchise usually in return for a fee and percentage of turnover

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6
Q

Franchiser

A

A franchiser sells a franchise usually in return for a fee and percentage of turnover

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7
Q

E-commerce

A

Act of buying or selling a product using an electronis system such as the internet

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8
Q

Outsourcing

A

Occurs when a business uses another business to produce for it

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9
Q

Merger

A

Two or more business join together to form a new business

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10
Q

Takeover

A

Occurs when a business buys control of another one

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11
Q

Economies of scale

A

Occurs when a business unit cost of production fall as its output rises and the business expands

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12
Q

Diseconomies of scale

A

Occurs when the cost per unit increases as the business expands

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13
Q

Methods of business expansion

A

Internal growth

External growth

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14
Q

Measuring size of a business

A

Value of sales
Value of business
Number of employees

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15
Q

Advantages of selling a franchise

A

Can grow quickly
Franchisee provides some of the finance
Franchisees motivated

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16
Q

Disadvantages of selling a franchise

A

Lose some control
Danger of problems with one
franchisee affecting the whole brand
Have to share profits

17
Q

Advantages of buying a franchise

A

Established brand
Access to training and supplies
Share marketing costs

18
Q

Disadvantages of buying a franchise

A 
Have to share profits
May have to work within franchisor's
quidelines
Share marketing costs
Learn from other franchisees
Have to contribute to group marketing
Sales

GCSE Business Studies TOPIC 1 (7 decks)

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