Business Edexcel GCSE Theme 2 Exam Questions with Correct Answers

What is internal (organic) growth + its methods - ANSWER-when a business expands by growing its own activities -new products (innovation, research and development) -new markets (through changing the marketing mix or taking advantage of technology and/or expanding overseas) advantages and disadvantages of organic growth - ANSWER-+ less risky as the business grows by doing what it is already good at so retains its culture, economies of scale, higher market share and sales - growth is slower what does external (inorganic) growth usually involve? - ANSWER-merger takeover advantages and disadvantages of external growth - ANSWER-+ economies of scale. increased revenue and market share - clash of cultures, diseconomies of scale (communication problems), lack of trust type of business ownership for growing businesses + advs & disadvs - ANSWER-public limited company + lots of finance raised, expand and diversify, limited liability - disagreements between shareholders, someone could take over the company, accounts must be made public internal sources of finance for established businesses - ANSWER-retained profit selling assets external sources of finance for established businesses - ANSWER-loan capital share capital, including stock market flotation why do business aims and objectives change as a business evolves? - ANSWER-in response to: market conditions technology performance legislation internal reasons how do business aims and objectives change as a business evolves? - ANSWER--focus on survival or growth -entering or exiting markets