Business Growth | Edexcel A-Level Business (9BS0)
Business Growth
- 97 questions
- 4 subtopics
- Theme 3: business decisions and strategy
- Paper 2 and Paper 3
Business growth is the second section of Theme 3.
It covers why a business grows at all, the economies and diseconomies that come with size, the difference between growing organically and buying growth, and the reasons a business might deliberately stay small.
Sample questions from Business Growth
Answer each one closed book first, then open the answer.
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Growth
Give an example of how external economies of scale might arise.
Show the answer
Growth of an industry may lead to development of specialist suppliers, skilled labour pools, or improved infrastructure that benefits all firms in that industry. -
Growth
Explain how communication problems develop as a business grows.
Show the answer
Communication becomes slower, messages become more distorted as they pass through more layers, and coordination between departments becomes harder. -
Mergers and takeovers
What is vertical integration?
Show the answer
Vertical integration occurs when businesses at different stages of the supply chain within the same industry combine. -
Mergers and takeovers
What is overtrading and why is it a problem of rapid growth?
Show the answer
Overtrading occurs when a business expands faster than its working capital can support, risking cash shortages and an inability to meet short-term obligations. -
Organic growth
What method of organic growth involves reaching different customer groups or locations?
Show the answer
Entering new markets, including new geographical areas or market segments. -
Organic growth
Why is organic growth often considered more sustainable than inorganic growth?
Show the answer
Because growth matches the development of internal capabilities, ensuring the business can support its expansion. -
Reasons for staying small
Why does flexibility give small businesses a competitive advantage over larger organisations?
Show the answer
Small businesses can adapt quickly to changing customer demands without the bureaucratic delays that affect larger organisations, allowing them to respond faster to market changes. -
Reasons for staying small
Explain how e-commerce enables small businesses to compete with larger firms.
Show the answer
E-commerce allows small businesses to reach wider markets without the costs of physical premises, enabling them to compete through online presence and direct customer access.
The 4 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| Growth | The objectives behind growth, internal and external economies of scale, market power, market share and brand recognition, and the diseconomies of scale, communication problems and overtrading that follow when a business grows too far. | 26 |
| Mergers and takeovers | Mergers against takeovers and the motives for each, horizontal and forward and backward vertical integration, the synergies and financial rewards a deal promises, its financial risks, the problems of rapid growth such as overtrading and culture clashes, and hostile and friendly takeovers. | 34 |
| Organic growth | How organic growth differs from inorganic, the methods available, and the control, culture and financing advantages of growing under its own steam. | 25 |
| Reasons for staying small | Product differentiation, niche markets, e-commerce and customer service as survival strategies, and the flexibility a small business keeps. | 12 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
Nearby topics
Edexcel A-Level Business Active Recall Guide
Every topic, not just this one. 2,305 questions with their answers.