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
-
How is organic business growth primarily achieved?
- Merging with rivals
- Buying suppliers
- Internal expansion
- Strategic acquisitions
-
Which strategy is an example of inorganic growth?
- Launching new products
- Opening new stores
- E-commerce expansion
- Takeover of competitor
-
Which action is an example of organic growth?
- Friendly takeover
- Horizontal merger
- Opening new branches
- Forward vertical integration
-
What is a major advantage of organic growth compared to a takeover?
- Immediate synergy
- Rapid market expansion
- Instant capacity gain
- Preserved company culture
-
What is a main disadvantage of organic growth compared to inorganic growth?
- High cultural clash
- Immediate debt spike
- Slower growth rate
- Regulatory intervention
-
What is the most common internal source of finance for organic growth?
- Venture capital
- Share issue
- Retained profit
- Government grants
-
What is a key benefit of growing organically by launching new products?
- Immediate synergy gains
- Broader product range
- Reduced fixed costs
- Instant market dominance
-
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
-
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
-
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
-
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%
-
Which major disadvantage of organic growth allows rivals to launch competing products first?
- Diseconomies of scale
- Slower growth rate
- Cultural clashes
- Loss of control
-
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
-
Which growth strategy relies entirely on internal resources rather than takeovers or mergers?
- Organic growth
- Inorganic growth
- Horizontal integration
- Vertical integration
-
Why might a business with a strong corporate culture prefer organic growth?
- Eliminates all risk
- Gains instant scale
- Reduces interest rates
- Avoids culture clashes
-
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
-
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
-
Which regulatory benefit does organic growth have over inorganic growth strategies?
- Avoids competition scrutiny
- Eliminates import tariffs
- Guarantees tax relief
- Bypasses employment laws
-
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
-
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
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