2.1.1 Business growth

• Mergers and acquisitions are an example of external growth.


  True
• Arrange the following types of business growth in order of complexity:

  1️⃣ Organic Growth

  2️⃣ Mergers and Acquisitions

  3️⃣ Diversification
• Diversification is resource-intensive and requires navigating unfamiliar markets.


  True
• What is the focus of market penetration as a growth strategy?

  Increasing sales in current markets
• What is the primary benefit of business expansion through franchising?

  Increased brand visibility
• A merger involves two companies combining to form a new, larger entity.


  True
• Acquisitions can provide faster expansion and access to new technologies.


  True
• What is business growth defined as?

  Expansion of operations, revenue, or market share
• What is the purpose of diversification as a growth strategy?

  Reduce risk and increase revenue streams
• Organic growth reduces costs and fosters customer loyalty
• Match the growth strategy with its primary benefit:

  Organic Growth ↔️ Lower costs

  Mergers and Acquisitions ↔️ Shared resources

  Diversification ↔️ New revenue streams
• Market development diversifies revenue streams and acquires new customers.

  True
• External growth methods involve combining with or acquiring other companies.


  True
• Match the benefit of a merger with its description:

  Increased market power ↔️ Higher market share and influence

  Economies of scale ↔️ Reduced costs per unit

  Diversification ↔️ Entry into new industries
• One of the challenges of acquisitions is the potential loss of talent
• Conflicting objectives can be a challenge in joint ventures.


  True
• Match the external growth method with its primary benefit:

  Mergers ↔️ Increased market power

  Acquisitions ↔️ Faster expansion

  Joint Ventures ↔️ Shared resources
• External factors impacting growth include market conditions and government policies
• Organic growth involves increasing sales and customer base from within the existing business.


  True
• Diversification reduces risk by entering new markets or developing new products.


  True
• Internal growth methods involve merging with or acquiring other companies.

  False
• Match the internal growth strategy with its primary focus:

  Market Penetration ↔️ Increasing sales in current markets

  Market Development ↔️ Expanding into new regions

  Product Development ↔️ Creating new products

  Business Expansion ↔️ Opening new branches
• Organic growth involves increasing sales and customer base from within the existing business
• Match the growth strategy with its primary challenge:

  Organic Growth ↔️ Limited impact

  Mergers and Acquisitions ↔️ Integration complexity

  Diversification ↔️ Unfamiliar markets
• What is a key challenge of mergers and acquisitions?

  Potential culture clashes
• Internal growth methods expand operations without merging with other companies
• Product development aims to create new products or improve existing ones
• External growth methods involve combining with or acquiring other companies
• An acquisition occurs when one company buys and takes control of another company
• Steps in forming a joint venture

  1️⃣ Two or more companies agree to combine resources

  2️⃣ They form a separate, jointly-owned business

  3️⃣ They share risks, rewards, and capabilities

  4️⃣ Coordination and objectives must be aligned
• A merger involves two companies combining to form a new, larger entity
• Business growth can be influenced by both internal and external factors
• Match the external factor with its description:

  Market conditions ↔️ Demand, competition, trends

  Government policies ↔️ Regulations, taxes, subsidies

  Economic climate ↔️ Interest rates, inflation, GDP
• Business growth refers to the expansion of a business's operations, revenue, or market share over time
• Match the growth strategy with its primary benefit:

  Organic Growth ↔️ Consistent improvement

  Mergers and Acquisitions ↔️ Market expansion

  Diversification ↔️ New revenue streams
• Market penetration focuses on increasing sales of existing products in current markets
• In a joint venture, two or more companies form a jointly-owned business
• Mergers always lead to economies of scale.


  True
• Match the external growth method with its challenge:

  Mergers ↔️ Cultural clashes

  Acquisitions ↔️ High costs

  Joint Ventures ↔️ Conflicting objectives
• Internal factors are within the organization's control.


  True