Expanding a busness

Question 1

Internal growth

Answer 1

By selling more of its own products.

Question 2

External growth

Answer 2

By joining with another business.

Question 3

Franchise

Answer 3

A franchise occurs when a franchisor sells the rights to its products to a franchisee; this is usually in return for a fee and percentage or turnover.

Question 4

Franchising

Answer 4

Franchising occurs when one business sells the rights to another business to use its name and sell its products.

Question 5

Outsourcing

Answer 5

Outsourcing occurs when a business uses other organisation to produce its products for it.

Question 6

Merger

Answer 6

A merger occurs when two or more businesses join together to form a new business.

Question 7

Business integration

Answer 7

Business integration is the process of combining various components of a business, such as departments, software systems, and business units, into a unifield and cohesive operation.

Question 8

Advantages of business expansion

Answer 8

-It can lead to more power in the market. Retailers are likely to be more willing to stock the products of a well-known brand.
-Big firms have more status and the people in charge will feel more important, especially if it has grown while they were in charge.
-Big firms are more expensive to take over so those in charge might feel safer.
-The rewards for staff are often linked to the size of the business so they may be eager for growth.