Business Growth (T3)

Question 1

Internal EOS

Answer 1

1. Buying in bulk
2. Technical (machinery)
3. Marketing
4. Specialisation
5. Financial
6. Risk-bearing (spreading)

Question 2

Examples of EOS

Answer 2

1. Lower interest on loans
2. Discounts for bulk buying
3. Specialist management skills

Question 3

Examples of Diseconomies OS

Answer 3

1. Speed of communication slows down
2. Synchronising production slows down
3. Lower levels of worker motivation

Question 4

What is synergy?

Answer 4

This occurs when the combining of resources or companies produce a better rate of return than had this been achieved independently.

This usually arises from gains made in EOS and greater market power.