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AQA A level business 3.9 Exam Study Guide. $10.49
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AQA A level business 3.9 Exam Study Guide.

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©THESTAR EXAM SOLUTIONS 2024/2025 ALL RIGHTS RESERVED. 1 | P a g e AQA A level business 3.9 Exam Study Guide. Define Growth - answerwhen there is an increase in the size of an organisation's operations Growth occurs in terms of ... x3 - answerPhysical assets (i.e. purchasing new premises) Nu...

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  • November 24, 2024
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©THESTAR EXAM SOLUTIONS 2024/2025

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AQA A level business 3.9 Exam Study Guide.

Define Growth - answer✔when there is an increase in the size of an organisation's operations


Growth occurs in terms of ... x3 - answer✔Physical assets (i.e. purchasing new premises)


Number of employees


Increasing product range


Reasons for growth X2 - answer✔Enter into new markets - spread risk


Gain economies of scale and reduce costs


Define Retrenchment - answer✔when there is an reduction in the size of an organisation's

operations


Reasons for retrenchment x2 - answer✔Focus on core competences - reduces loses or sell off

less profitable parts of the business


Increase efficiency


Types of growth x2 - answer✔Organic growth


External growth




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, ©THESTAR EXAM SOLUTIONS 2024/2025

ALL RIGHTS RESERVED.
Define organic growth - answer✔when an organisation increases their sales through expanding

the scope of their internal operations


Organic growth examples include x2 - answer✔Expanding the current asset base (buying new

factories or premises from where to operate)


Increasing the product range


Organic growth is funded through x3 - answer✔Retained profit


new share issue


Loan capital


Define external growth - answer✔when an organisation increases their sales through

integrating with other businesses


External growth examples x2 - answer✔Mergers


takeovers


External growth funded through - answer✔External sources of finance


Organic growth pros x2 - answer✔abality to maintain culture , management style , brand image

and USP


Potentially less risk then external growth


Organic growth cons x2 - answer✔Can be slower then external growth



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, ©THESTAR EXAM SOLUTIONS 2024/2025

ALL RIGHTS RESERVED.
Risk of missing out on opportunities in fast growing market


Organic growth most appropriate when x2 - answer✔Business has USP and strong brand image


Business has a unique culture


External growth pro x2 - answer✔Gain synergies and economies of scale


Reduce level of competition


External growth cons x3 - answer✔•Difficulties of merging two companies - cultures and

systems


•Impact on motivation - job losses, reorganisation of work and uncertainty


•Buying another organisation's liabilities


External growth most appropriate when x2 - answer✔•Business a strong management team

able to integrate cultures


•Significant economies of scale and scope are achievable


Define Economies of scale (EoS) - answer✔The benefits to a business, in the form of lower

average unit costs, from increasing the size of operation


Type of economy: Purchasing - answer✔Bigger business (powerful)> supplier = neogatiate

discounts/ longer periods of trade credit/reduced average cost/flexible design

specification/delivery arrangments




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