Lesson 3.2.3

3.2.3 Organic growth Quiz: Pearson Edexcel Business, Unit 3

20 questions

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Lesson 3.2.3, Organic growth: 20 multiple choice questions for the Pearson Edexcel Business (9BS0), Unit 3: Business decisions and strategy, written with Revision Ninja.

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The 20 questions

  1. How is organic business growth primarily achieved?

    • Merging with rivals
    • Buying suppliers
    • Internal expansion
    • Strategic acquisitions
  2. Which strategy is an example of inorganic growth?

    • Launching new products
    • Opening new stores
    • E-commerce expansion
    • Takeover of competitor
  3. Which action is an example of organic growth?

    • Friendly takeover
    • Horizontal merger
    • Opening new branches
    • Forward vertical integration
  4. What is a major advantage of organic growth compared to a takeover?

    • Immediate synergy
    • Rapid market expansion
    • Instant capacity gain
    • Preserved company culture
  5. What is a main disadvantage of organic growth compared to inorganic growth?

    • High cultural clash
    • Immediate debt spike
    • Slower growth rate
    • Regulatory intervention
  6. What is the most common internal source of finance for organic growth?

    • Venture capital
    • Share issue
    • Retained profit
    • Government grants
  7. What is a key benefit of growing organically by launching new products?

    • Immediate synergy gains
    • Broader product range
    • Reduced fixed costs
    • Instant market dominance
  8. A firm opens five new stores over three years, using only its own profits. Which type of growth is this?

    • Organic growth
    • Inorganic growth
    • Vertical integration
    • Conglomerate merger
  9. What key trade-off do owners face when choosing organic growth over acquisition?

    • Profit versus liquidity
    • Risk versus return
    • Price versus quality
    • Control versus speed
  10. A firm earns retained profit of 300,000 pounds and invests 120,000 pounds in new stores. How much retained profit is left?

    • 120,000 pounds
    • 420,000 pounds
    • 180,000 pounds
    • 300,000 pounds
  11. A firm's sales grow from 500,000 pounds to 600,000 pounds through organic expansion. What is the percentage growth?

    • 15%
    • 25%
    • 10%
    • 20%
  12. Which major disadvantage of organic growth allows rivals to launch competing products first?

    • Diseconomies of scale
    • Slower growth rate
    • Cultural clashes
    • Loss of control
  13. A firm that expands overseas by setting up its own subsidiary from scratch is most likely pursuing:

    • A demerger
    • Horizontal merger
    • Backward vertical integration
    • Organic growth
  14. Which growth strategy relies entirely on internal resources rather than takeovers or mergers?

    • Organic growth
    • Inorganic growth
    • Horizontal integration
    • Vertical integration
  15. Why might a business with a strong corporate culture prefer organic growth?

    • Eliminates all risk
    • Gains instant scale
    • Reduces interest rates
    • Avoids culture clashes
  16. What is the main risk of growing organically in a rapidly consolidating market?

    • Higher gearing ratio
    • Losing market share
    • Loss of ownership
    • Overspending on research
  17. What is the main internal financial constraint limiting the pace of organic growth?

    • Bank overdraft fees
    • Exchange rate changes
    • Retained profit levels
    • Share capital limits
  18. Which regulatory benefit does organic growth have over inorganic growth strategies?

    • Avoids competition scrutiny
    • Eliminates import tariffs
    • Guarantees tax relief
    • Bypasses employment laws
  19. What advantage does developing a new product internally offer over buying an existing brand?

    • Tailored product design
    • Zero development time
    • Immediate cash flows
    • Instant customer base
  20. Compared to an acquisition strategy, what is a primary risk of relying on organic growth?

    • Diluted shareholder equity
    • Integration failure costs
    • Slower market penetration
    • Loss of control

All Pearson Edexcel Business quizzes