2.1.1 Business Growth

Question 1

What is Organic growth?

Answer 1

Also called internal growth, it is when a business decides to expand by launching new roducts or entering new markets.

Question 2

What are the 3 methods of organic growth?

Answer 2

New markets
New products
New technology

Question 3

What is inorganic growth?

Answer 3

When a business decides to grow using external sources

Question 4

What are the methods of inorganic growth?

Answer 4

Merger
Takeover

Question 5

What are the advantages of organic growth?

Answer 5

Less risky
Keep control

Question 6

What are the disadvantages of organic growth?

Answer 6

Could be slow growth
Could miss out on other expertise people have

Question 7

What are the advantages of a PLC?

Answer 7

Able to raise finance through share capital
Limited liability
Considered more reliable to lenders
More public awareness of business

Question 8

What are the disadvantages of a PLC?

Answer 8

Risk of being taken over
Financial accounts published
More public scrutiny/attention
Shareholders have more influence on how business is run

Question 9

What is a multinational company?

Answer 9

A business with operations in more than one country

Question 10

What are the advantages of a MNC?

Answer 10

Wider target market
Can take advantage of cheaper labour
Spreads risk

Question 11

What are the disadvantages of a MNC?

Answer 11

Cultural and language barriers
Can damage reputation if unethical behaviour