2.1 Growing the business

Question 1

Innovation

Answer 1

Innovation: bringing a new idea to the market,

Question 2

Inorganic growth

Answer 2

Inorganic (external) growth: growing by buying
up other businesses or by merging with a
business of roughly equal size.

Question 3

Organic growth

Answer 3

Organic (internal) growth: growth from within
the business, such as creating and launching
successful new products.

Question 4

Research and development

Answer 4

Research and development (R&D): the scientific
research and technical development needed to
come up with successful new products.

Question 5

Takeover

Answer 5

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

Question 6

Flotation

Answer 6

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

Question 7

Public limited company

Answer 7

Public limited company (plc): 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 8

Entering markets

Answer 8

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

Question 9

Exiting markets

Answer 9

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

Question 10

Competing internationally

Answer 10

Competing internationally: finding a way to succeed against rivals from overseas.

Question 11

Free trade

Answer 11

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

Question 12

Globalisation

Answer 12

Globalisation: 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

Imports

Answer 13

Imports: goods or services bought from overseas.

Question 14

Tariffs

Answer 14

Tariffs: taxes charged only on imports.

Question 15

Trade blocs

Answer 15

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

Question 16

Ethical considerations

Answer 16

Ethical considerations: 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 17

Ethics

Answer 17

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

Question 18

Fair trade

Answer 18

Fair trade: 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.

Question 19

Trade-offs

Answer 19

Trade-offs: 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 20

Environment

Answer 20

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

Question 21

Environmental considerations

Answer 21

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

Question 22

Sustainability

Answer 22

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