IB DP Business Management Quiz: Growth And Evolution

To gain a good brand image

To lower average costs as production increases

To increase market share

To increase sources of finance

Technical economies

Financial economies

Managerial economies

Lack of control and coordination

Lowering average costs as production increases

Complacency

Bureaucracy

Joint venture

Innovative marketing campaign

Mergers

Strategic alliance

Selling in different locations

Takeover

Acquisition

Franchising

% of units sold

% of revenue

% of profits

All are ways to measure market share

Increased profitability

Greater brand recognition

More units sold

All are benefits

True

False

Better control

Maintaining company culture

Relatively inexpensive

Overtrading

Also known as inorganic growth

Fastest way to increase market share

Increases likelihood of gaining economies of scale

Makes for easier control and coordination

Internal growth strategy which effectively allows firms to enter foreign markets by taking advantage of local knowledge

External growth strategy which effectively allows firms to enter foreign markets by taking advantage of local knowledge

Internal growth strategy when a firm buys a controlling interest in another company

External growth strategy when a firm buys a controlling interest in another company

Airline companies working together to offer connecting flights outside their normal operations (Vietnam Airlines and Delta Airlines work together to offer Vietnam to Los Angeles flights

A firm buys a controlling interest in another company.

Two firms agree to form a new company

A company pays a licensing fee to use another firms logo and brand

True

False

True

False

True

False

A benefit potentially gained after an acquisition as the two merged parts create a greater combined effect than could be obtained individually

A negative gained after an acquisition as the two merged parts create a worse combined effect than could be obtained individually

The point on the business cycle where the firm expects to have a large gain in profitability

The point on the business cycle where the firm expects to have a large loss

Less financial risk involved than organic growth

It is a cheaper growth strategy since the franchisee provides financing

Franchisor receives monthly royalty payments which is typically a percentage of sales (whether the franchisee makes a profit or not)

All of the above are advantages of franchising for the franchisor

Relatively low start up costs as the business model has already been established

The franchisor wants the franchisee to succeed and provide the necessary training to increase the likelihood of success

The firm can easily and quickly adapt their offerings if they notice their customers have new tastes and preferences

Will benefit from a large advertising campaign put together by the franchisor

Brand image may be harmed if the franchisee does not follow quality and procedural standards set by the franchisor

Franchisee may not offer the quality service the franchisor expects

Franchisee will have a greater understanding of its market

All of the above are risk for the franchisor

Market penetration

Product development

Market development

Diversification