2.1 Growing the business

Question 1

Innovation:

Answer 1

bringing a new idea to the market, such as Warburtons’ clever idea of an extra- large crumpet.

Question 2

Inorganic (external) growth:

Answer 2

growing by buying up other businesses or by merging with a business of roughly equal size.

Question 3

Organic (internal) growth:

Answer 3

growth from within the business, such as creating and launching successful new products.

Question 4

Research and development (R&D):

Answer 4

the scientific research and technical development needed to come up with successful new products.

Question 5

Takeover:

Answer 5

obtaining control of another business by buying more than 50 per cent of its share capital.

Question 6

Merger:

Answer 6

when two businesses of roughly equal size agree to come together to form one big business.

Question 7

Flotation:

Answer 7

listing company shares on the stock market, allowing anyone to buy the shares. This means the price can float freely (up and down).

Question 8

Public limited company (plc):

Answer 8

a company with at least £50,000 of share capital that can advertise its shares to outsiders and is, therefore, allowed to fl oat its shares on the stock market.

Question 9

Entering markets:

Answer 9

when a company decides to open up in a market it hasn’t been in before, for example Walkers launching
cereal bars.

Question 10

Exiting markets:

Answer 10

choosing to leave a market, probably because it was loss-making and looked set to continue.

Question 11

Competing internationally:

Answer 11

finding a way to succeed against rivals from overseas.

Question 12

Globalisation:

Answer 12

the increasing tendency for countries to trade with each other and to buy global goods, such as Coca-Cola, or services, such as Costa Coffee.

Question 13

Free trade:

Answer 13

trade between countries with no barriers, for example no tariffs.

Question 14

Imports:

Answer 14

goods or services bought from overseas.

Question 15

Trade blocs:

Answer 15

a group of countries that have agreed to have free trade within external tariff walls.

Question 16

Tariffs:

Answer 16

taxes charged only on imports.

Question 17

Ethical considerations:

Answer 17

thinking about ethics, which may lead to morally valid decisions or may lead to the manipulation of customer
attitudes (that is, pretending to be ethical).

Question 18

Ethics:

Answer 18

weighing up decisions or actions on the basis of morality, not personal gain.

Question 19

Fair trade:

Answer 19

a social movement whose goal is to help producers in developing countries achieve better trading conditions and to promote sustainability. It ensures that the price paid is high enough to allow fair wages to be paid to the workers who produced it. Fair trade certification can be found on many products, including KitKats.

Question 20

Trade-offs:

Answer 20

how having more of one thing may force you to have less of another; for example, higher ethical standards may mean less profi t.

Question 21

Environment:

Answer 21

the condition of the natural world that surrounds us, which is damaged when there’s pollution.

Question 22

Environmental considerations:

Answer 22

factors relating to ‘green’ issues, such as sustainability
and pollution.

Question 23

Sustainability:

Answer 23

whether or not a resource will inevitably run out in the future; a sustainable resource will not.