1.7 Expanding a business

• Business expansion can help achieve economies of scale.

  True
• Market penetration involves increasing sales of existing products in existing markets
• Combining with or taking over another business to gain new resources and markets is called mergers and acquisitions.
• Business expansion refers to the process of growing a business and increasing its size and operations.
• Business expansion can help achieve economies of scale and increase market share.


  True
• Inorganic growth involves expansion through methods like mergers, acquisitions, and franchising.
• What is the description of inorganic growth?

  Expansion through external methods
• Order the characteristics of organic and inorganic growth based on their growth rate:

  1️⃣ Organic: Slower growth

  2️⃣ Inorganic: Faster growth
• In the comparison of organic and inorganic growth, organic growth has a lower risk level.
• McDonald's expanding into new countries is an example of market development.


  True
• What does the term "business expansion" refer to?

  Growing a business
• Inorganic growth allows a business to expand rapidly but involves less direct control
• What does market development involve as an organic growth strategy?

  Expanding into new markets
• Forming a partnership with another business to share resources and expand into new markets is called a joint venture.
• Match the method of business expansion with its description:

  1️⃣ Organic growth

  2️⃣ Mergers and acquisitions

  3️⃣ Franchising

  4️⃣ Joint ventures
• The two main methods for business expansion are organic growth and inorganic growth.
• Organic growth is characterized by slow, gradual expansion and full control.

  True
• Inorganic growth allows businesses to access new resources and markets but reduces direct control.
• Match the method with its characteristics:

  Organic growth ↔️ Lower risk and full control

  Inorganic growth ↔️ Higher risk and reduced control
• What is market penetration as an organic growth strategy?

  Increasing sales in existing markets
• What is product development as an organic growth strategy?

  Introducing new products
• What does inorganic growth rely on for expansion?

  External resources
• Mergers and acquisitions allow businesses to gain new resources, capabilities, and market access
• Match the growth strategy with its characteristic:

  Organic Growth ↔️ Slow and sustainable

  Inorganic Growth ↔️ Rapid expansion
• What does product development introduce to existing markets?

  New products
• What is a key financial resource to consider before expanding a business?

  Cash flow
• What is the primary goal of business expansion?

  Increasing size or market share
• What is a method for market penetration under organic growth?

  Competitive pricing
• Market development involves expanding into new markets
• Order the organic growth strategies from lowest to highest risk:

  1️⃣ Market Penetration

  2️⃣ Market Development

  3️⃣ Product Development
• An acquisition occurs when a business takes over another, gaining its assets and customer base.


  True
• Organic growth strategies provide sustainable growth but limited access to new resources
• Product development can boost market share but carries higher risk
• What is the primary importance of sufficient capital when expanding a business?

  Funding the expansion
• How does diversification reduce risk for a business during expansion?

  By spreading reliance on a single revenue stream
• Match the method of business expansion with its description:

  Organic growth ↔️ Expanding using own resources

  Mergers and acquisitions ↔️ Combining with another business

  Franchising ↔️ Granting rights to third parties
• What is the primary characteristic of organic growth in terms of speed?

  Slow and gradual
• Product development aims to diversify the product range and respond to changing customer needs.


  True
• Expanding a business can help it achieve economies of scale, increase market share, and diversify operations.

  True
• Match the method of business expansion with its description:

  Organic growth ↔️ Expanding using own resources

  Mergers and acquisitions ↔️ Combining with another business

  Franchising ↔️ Granting rights to use name

  Joint ventures ↔️ Forming a partnership