IB DP Business Management Quiz: Growth And Evolution
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Revision for IB DP Business Management. Remember that this is just the first step in your revision and you will need to apply this knowledge to case studies and real life examples in order to do well on the IB exam. Created by Dan Slaughter
- 1.The main reason why firms try to achieve economies of scale is?
- A.
To gain a good brand image
- B.
To lower average costs as production increases
- C.
To increase market share
- D.
To increase sources of finance
- 2.Which of the following is not an example of internal economies of scale?
- A.
Technical economies
- B.
Financial economies
- C.
Managerial economies
- 3.Which of the following is not an example of diseconomies of scale?
- A.
Lack of control and coordination
- B.
Lowering average costs as production increases
- C.
Complacency
- D.
Bureaucracy
- 4.Which of the following is an example of organic growth?
- A.
Joint venture
- B.
Innovative marketing campaign
- C.
Mergers
- D.
Strategic alliance
- 5.Which of the following is an example of organic growth?
- A.
Selling in different locations
- B.
Takeover
- C.
Acquisition
- D.
Franchising
- 6.Which of the following is not a why to measure market share?
- A.
% of units sold
- B.
% of revenue
- C.
% of profits
- D.
All are ways to measure market share
- 7.Which of the following is not always a benefit of increasing market share?
- A.
Increased profitability
- B.
Greater brand recognition
- C.
More units sold
- D.
All are benefits
- 8.Organic growth is the quickest way for a company to grow
- A.
True
- B.
False
- 9.Which of the following is not a benefit of organic growth?
- A.
Better control
- B.
Maintaining company culture
- C.
Relatively inexpensive
- D.
Overtrading
- 10.Which of the following is not true about external growth
- A.
Also known as inorganic growth
- B.
Fastest way to increase market share
- C.
Increases likelihood of gaining economies of scale
- D.
Makes for easier control and coordination
- 11.Joint venture can be described as an
- A.
Internal growth strategy which effectively allows firms to enter foreign markets by taking advantage of local knowledge
- B.
External growth strategy which effectively allows firms to enter foreign markets by taking advantage of local knowledge
- C.
Internal growth strategy when a firm buys a controlling interest in another company
- D.
External growth strategy when a firm buys a controlling interest in another company
- 12.Which of the following is an example of a strategic alliance?
- A.
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
- B.
A firm buys a controlling interest in another company.
- C.
Two firms agree to form a new company
- D.
A company pays a licensing fee to use another firms logo and brand
- 13.Two firms that decide to come together and form one company is an example of?
- 14.A firm buys a controlling interest in another firm is an example of?
- 15.Lateral integration is when a firm buys another firm that is in the same industry but not directly in competition with each other. An example would Toyota buying Ferrari
- A.
True
- B.
False
- 16.McDonald’s buying out the farms (its suppliers) for its beef is an example of
- 17.A firm taking over another firm within the same industry is an example of horizontal integraton.
- A.
True
- B.
False
- 18.A conglomerate is when two or more corporations who work in the same sector come under a parent company
- A.
True
- B.
False
- 19.Synerygy is
- A.
A benefit potentially gained after an acquisition as the two merged parts create a greater combined effect than could be obtained individually
- B.
A negative gained after an acquisition as the two merged parts create a worse combined effect than could be obtained individually
- C.
The point on the business cycle where the firm expects to have a large gain in profitability
- D.
The point on the business cycle where the firm expects to have a large loss
- 20.The purchaser of the franchise is known as?
- 21.The parent company who receives the licensing for use of the companies brand, logo, etc in franchising the business
- 22.Which of the following is not an advantage of franchising for the franchisor?
- A.
Less financial risk involved than organic growth
- B.
It is a cheaper growth strategy since the franchisee provides financing
- C.
Franchisor receives monthly royalty payments which is typically a percentage of sales (whether the franchisee makes a profit or not)
- D.
All of the above are advantages of franchising for the franchisor
- 23.Which of the following is not an advantage of franchising for the franchisee?
- A.
Relatively low start up costs as the business model has already been established
- B.
The franchisor wants the franchisee to succeed and provide the necessary training to increase the likelihood of success
- C.
The firm can easily and quickly adapt their offerings if they notice their customers have new tastes and preferences
- D.
Will benefit from a large advertising campaign put together by the franchisor
- 24.Which of the following is not a risk the franchisor takes on when franchising?
- A.
Brand image may be harmed if the franchisee does not follow quality and procedural standards set by the franchisor
- B.
Franchisee may not offer the quality service the franchisor expects
- C.
Franchisee will have a greater understanding of its market
- D.
All of the above are risk for the franchisor
- 25.According to the Ansoff Matrrix, the following would be considered a low risk growth strategy
- A.
Market penetration
- B.
Product development
- C.
Market development
- D.
Diversification
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