growth

• What should you consider when giving an impact in an exam response?


  Think positive and negative.
• What is required when justifying an answer in a 9-mark question?

  Relate to the case study and use 2-3 connectives per paragraph.
• What is the structure for a 9-mark justification response?


  1. Make a choice and explain one reason/advantage.
  2. Discuss the downside of your choice and why.
  3. Conclude with another reason/advantage of your choice or a disadvantage of the other choice.
• How many paragraphs should be included in a 6-mark discussion question?


  Two paragraphs.
• What should you think about when discussing in a business context?


  Think 'in theory' and apply general business knowledge.
• How many paragraphs are required for a 6-mark analysis question?


  Two paragraphs.
• What should you apply in your analysis of a case study?


  Business knowledge while taking the situation into account.
• What are the ways to measure a business's growth?

  • Profit
  • Number of employees
  • Number of branches
  • Sales revenue
  • Market share
  • Capital invested
  • Number of customers/global spread of customers
  • Volume of output
• What are the two main types of business growth?

  Internal (organic) and external (inorganic) growth.
• What is organic growth in a business context?


  • Expansion from within
  • New product development
  • Moving into new markets
• What are innovations in business?


  New product ideas brought to market for customers to buy.
• What are some benefits of bringing out new products?

  Access new customers, additional sales, raise brand awareness, and gain a competitive edge.
• What are the benefits of opening new outlets or moving overseas?

  • Access to a larger market
  • Increase in sales
  • Increased brand awareness
• What are the advantages of organic growth?

  • Retains company culture
  • Benefits from economies of scale
  • More market influence
  • Less risk than inorganic growth
  • Can be financed through internal funds
  • Builds on business strengths
• What are the disadvantages of organic growth?


  • Risk of expensive mistakes
  • Growth may depend on overall market growth
  • Hard to build market share if already a leader
• What is inorganic growth?


  • Growth through mergers or takeovers
  • Quick access to new markets
• What is a takeover?


  When one company wants to take over another by agreeing on a price.
• What is a merger?

  When shareholders of two businesses agree to share ownership and control.
• What are the advantages of inorganic growth?

  • Reduced competition and increased market share
  • Transfer of knowledge, skills, and technology
  • Easier access to finance and better buying power
  • Opportunity to diversify into new markets
• What are the disadvantages of inorganic growth?


  • Potential inefficiencies in management and communication
  • Cultural clashes between merging businesses
  • Possible redundancies and job insecurity
  • Difficulty in achieving cost savings quickly
  • Lack of knowledge about the acquired business
• What are the internal sources of finance for business growth?


  • Retained profit
  • Selling off assets
• What is retained profit?

  Net profit reinvested in the business instead of distributed as dividends.
• What are the advantages of retained profit?


  No interest, readily available, and builds on business strengths.
• What are the disadvantages of retained profit?


  Slow growth, may not be enough, and shareholders may be unhappy with no dividends.
• What is selling unwanted assets?


  Generating finance by selling non-current assets like land or machinery.
• What are the external sources of finance for business growth?

  Loan capital and share capital.
• What is loan capital?


  A borrowed amount of money with a set repayment schedule.
• What are the advantages of loan capital?


  No control is lost, fixed interest rates, and repayments in installments.
• What are the disadvantages of loan capital?


  Time-consuming to apply, security must be given, and lack of flexibility.
• What is share capital?


  Funds raised by selling shares to investors.
• What is a Public Limited Company (PLC)?


  A business that can sell shares to the public via the stock market.
• What are the key characteristics of a PLC?


  Limited liability, accounts are public, and £50,000 in shares needed to become a PLC.
• What are the key business aims/objectives?


  • Sales
  • Profit
  • Challenge
  • Social objectives
  • Personal satisfaction
  • Survival
  • Independence and control
  • Market share
  • Financial security
• How do business aims and objectives change as a business grows?


  They may change based on the external environment and market conditions.
• What are the causes of change in business objectives?


  • Market conditions
  • Technology
  • Business performance
  • Legislation
  • Internal reasons
• What do market conditions refer to?


  The current situation in the market that affects a business's operations.
• How can increased competition affect luxury businesses?


  It may lead to a loss of sales.
• How can advances in technology impact a manufacturing business?


  They can improve efficiency and output but may increase short-term costs.
• What are changes in performance in a business context?


  How efficient a business is over time, affecting revenue and market share.
• How can changes in legislation affect a business?


  They can impact sales, revenue, employment levels, and production methods.