Lesson 5.1.2

5.1.2 External Growth Quiz: NCFE Business & Enterprise, Unit 5

20 questions · by Revision Ninja

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This free External Growth quiz has 20 multiple choice questions for the NCFE Level 1/2 Technical Award in Business and Enterprise (NCFE Business & Enterprise), Unit 5: Growth. It covers lesson 5.1.2, External Growth, one of the ready-made revision sets written with Revision Ninja and organised by unit on Qwiz Rush.

Use it as a starter, a plenary or an end-of-unit check: host it live on the board and students join with a game code on their own devices — no student accounts and nothing to install — or set it for independent revision with Free Play, where each student works through the questions alone.

Every question runs on a 20-second countdown and the fastest correct answers score the most. All the questions and their choices are listed below so you can see what the quiz covers; the answers are revealed in the game. Want to change something? Make your own copy and edit it in your library.

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The 20 questions

  1. Which of these is an example of a business growing externally rather than internally?

    • Opening its own new branches in overseas markets
    • Training staff to raise output
    • Merging with a rival manufacturer
    • Launching a new product in-house

  2. Two food manufacturers merge into a single company. Which benefit does the merger most directly bring?

    • Full ownership kept by the founders
    • Royalty income paid by franchisees
    • Shared risk on a single new project
    • Lower costs from economies of scale

  3. A UK retailer merges with a French rival of a similar size. Which challenge are the managers most likely to face?

    • Weaker buying power with suppliers
    • Slower growth than organic expansion
    • Clashing cultures and working styles
    • Paying a licence fee to the other firm

  4. Kraft and Heinz merged in 2015 to create one of the world's biggest food groups. Why was the deal attractive to both?

    • Costs fell and market power grew
    • Risk on one new product was shared
    • Both firms stayed fully independent
    • Franchise fees flowed in from outlets

  5. Which statement best describes what happens in a takeover?

    • Two firms create a jointly owned new company
    • Two similar firms agree to join as equals
    • One firm buys control of another firm
    • A firm sells the right to its brand

  6. A UK bakery chain takes over a smaller competitor. What advantage is the buyer most likely to gain?

    • A steady fee from each new franchisee
    • A share of a joint project's profits
    • Instant access to the rival's customers
    • Slower but safer growth from within

  7. Sainsbury's bought Argos in 2016 and placed Argos counters inside its supermarkets. What was a main benefit?

    • Cheaper own-brand food from bigger bulk orders
    • A much wider product range in one store
    • Risk shared with a partner on a new venture
    • Franchise fees paid by Argos owners

  8. Which statement best describes a joint venture?

    • Two firms share a specific new project
    • Two firms combine into a single firm
    • One firm buys control of another firm
    • A firm sells brand rights to owners

  9. Two firms set up a joint venture to launch a product in a new overseas market. What is the main benefit for each?

    • Each firm keeps all the profits it makes
    • One firm gains control by buying the other
    • A local partner pays a licence fee to trade
    • Costs and risks are split between them

  10. Starbucks and PepsiCo formed a joint venture to sell bottled Frappuccino. What did PepsiCo mainly bring to it?

    • A vast bottling and distribution network
    • Cash to take full control of Starbucks
    • Skill in roasting speciality coffee beans
    • A well-known coffee shop brand name

  11. A café firm wants to get bigger. Which of these would be external growth?

    • Opening ten more of its own branches
    • Buying a rival chain of coffee shops
    • Training baristas to serve faster
    • Launching a new range of iced drinks

  12. A large supermarket buys a majority stake in a smaller chain and now runs it. This is a:

    • Merger
    • Joint venture
    • Franchise
    • Takeover

  13. A UK drinks firm sets up a joint venture with a Japanese partner. What is the main gain for the UK firm?

    • The two firms become one legal company
    • The partner pays a fee to use the brand
    • The partner already knows the local market
    • The partner's shares are bought outright

  14. What is the key difference between a merger and a takeover?

    • A merger is between rivals; a takeover is not
    • A merger is agreed; a takeover can be hostile
    • A merger uses cash; a takeover uses shares
    • A merger is temporary; a takeover is permanent

  15. Which of these is a drawback of growing by taking over another firm?

    • Every decision must be agreed with a partner
    • Quality control passes to the franchisee
    • Growth is slow as new outlets must be built
    • Staff clash over different ways of working

  16. Two food firms form a joint venture to sell a new bottled coffee. What happens to the two firms?

    • They combine to form one new company
    • They stay separate but share the project
    • One firm licenses its brand for a fee
    • One firm buys a controlling stake in the other

  17. Why do firms often prefer external growth to growing organically?

    • It keeps ownership in the founder's hands
    • It costs far less than opening new outlets
    • It is easier to keep the culture the same
    • It builds market share far more quickly

  18. Two large brewers merge. Which benefit is the new firm most likely to gain?

    • Regular fee income from franchisees
    • Lower unit costs from buying in bulk
    • A share of a partner's local knowledge
    • Full control kept by the original owner

  19. Why might the UK competition regulator block one supermarket chain from buying a rival?

    • The firms are based in different countries
    • The new firm would sell too many products
    • Shoppers would be left with less choice
    • Shareholders were offered too little cash

  20. A firm borrows heavily to fund a takeover. What is the main risk it now faces?

    • The lender takes control of the new firm
    • Interest payments may swallow its profits
    • Its shareholders lose limited liability
    • It will pay a higher rate of corporation tax