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business > Growing a business > Flashcards

Growing a business Flashcards

1
Q

How can business growth occur

A

employing more people; opening more branches; increasing sales/revenue; increasing profits

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2
Q

whats organic growth

A

when a business expands from within

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3
Q

whats innovation

A

The act of creating new products or processes.

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4
Q

how can a business attempt to enter new markets

A

entering overseas markets; amending its marketing mix; taking advantage of technology

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5
Q

what is a domestic market

A

The supply and demand of goods and services within a single country

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6
Q

what is an advantage of internal growth

A

low risk, more sustainable

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7
Q

what is disadvantge of internal growth

A

slow

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8
Q

what are 2 types on external growth

A

merger (2 businesses form into 1), takeover (an existing business expands by buying more than half the
shares of another business)

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9
Q

what is advantages of external growth

A

quicker, may get rid of competition, new ideas/expertise

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10
Q

what is disadvantages of external growth

A

clash of culture, increased costs (short term)

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11
Q

what are PLC’s

A

public limited companies-
shares are sold to the public on the
stock market

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12
Q

what are advantages of PLC’s

A

limited liability

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13
Q

what are disadvantages of PLC’s

A

expensive to set up, greater risk of hostile, rival takeover

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14
Q

internal sources of finance

A

retained profits, selling of assets, the owners savings

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15
Q

what is advantage of using retained profit as a use of internal finance

A

cheap, quick and convenient, and there is easy access to the money

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16
Q

what is disadvantage of using retained profit as a use of internal finance

A

once the money is gone, it is not available for any future unforeseen problems the business might face

17
Q

what is advantage of selling assets as a use of internal finance

A

convenient, can create space for more profitable uses, and can be quick

18
Q

what is disadvantage of selling assets as a use of internal finance

A

might not get the full market value of the assets or even sell them at all, might also need the assets in the future

19
Q

what is advantage of owners savings as a use of internal finance

A

cheap, quick and convenient

20
Q

what is disadvantage of owners savings as a use of internal finance

A

the owner might not have enough savings or may need the cash for personal use

21
Q

what are external sources of finance

A

trade credit, personal loans, bank loans, overdrafts, share capital

22
Q

what is advantage of using loan capital as a use of external finance

A

regular repayments are made over a period of time

23
Q

what is disadvantage of using loan capital as a use of external finance

A

takes time, interest/collateral applied,

24
Q

what is advantage of using share capital as a use of external finance

A

does not have to be repaid and no interest applied, can choose to whom it offers shares

25
Q

globalisation meaning

A

refers to companies operating internationally/ on a global scale

26
Q

what is a tariff

A

a tax placed on imported goods from other countries

27
Q

advantages of tariffs

A

protect infant industries and allow them to become more competitive globally, increase in government tax revenue, reduces companies selling for low prices and high volume as they can not sell below market price

28
Q

disadvantage of tariffs

A

increased costs of imports, reduces competition and customer choice

29
Q

what is a trade bloc

A

group of countries that form an agreement to reduce/eliminate protectionist measures between eachother

30
Q

advantages for businesses inside a trading bloc

A

wider markets, external tariff walls, infrastructure support, free movement of labour

31
Q

disadvantages of businesses inside a trading bloc

A

increased competition, common rules and regulations, retaliation, inefficiency

32
Q

when competing internationally what should a business take into account

A

cultural/taste differences, inappropriate branding/promotion/ translations

business (8 decks)

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