©Themoon EXAM SOLUTIONS
22/11/2024 12:41PM
AQA A level business 3.9 Exam Questions
and Answers
Define Growth - Answers✓✓when there is an increase in the size of an organisation's
operations
Growth occurs in terms of ... x3 - Answers✓✓Physical assets (i.e. purchasing new premises)
Number of employees
Increasing product range
Reasons for growth X2 - Answers✓✓Enter into new markets - spread risk
Gain economies of scale and reduce costs
Define Retrenchment - Answers✓✓when there is an reduction in the size of an organisation's
operations
Reasons for retrenchment x2 - Answers✓✓Focus on core competences - reduces loses or sell
off less profitable parts of the business
Increase efficiency
Types of growth x2 - Answers✓✓Organic growth
External growth
, ©Themoon EXAM SOLUTIONS
22/11/2024 12:41PM
Define organic growth - Answers✓✓when an organisation increases their sales through
expanding the scope of their internal operations
Organic growth examples include x2 - Answers✓✓Expanding the current asset base (buying
new factories or premises from where to operate)
Increasing the product range
Organic growth is funded through x3 - Answers✓✓Retained profit
new share issue
Loan capital
Define external growth - Answers✓✓when an organisation increases their sales through
integrating with other businesses
External growth examples x2 - Answers✓✓Mergers
takeovers
External growth funded through - Answers✓✓External sources of finance
Organic growth pros x2 - Answers✓✓abality to maintain culture , management style , brand
image and USP
Potentially less risk then external growth
Organic growth cons x2 - Answers✓✓Can be slower then external growth
Risk of missing out on opportunities in fast growing market
, ©Themoon EXAM SOLUTIONS
22/11/2024 12:41PM
Organic growth most appropriate when x2 - Answers✓✓Business has USP and strong brand
image
Business has a unique culture
External growth pro x2 - Answers✓✓Gain synergies and economies of scale
Reduce level of competition
External growth cons x3 - Answers✓✓•Difficulties of merging two companies - cultures and
systems
•Impact on motivation - job losses, reorganisation of work and uncertainty
•Buying another organisation's liabilities
External growth most appropriate when x2 - Answers✓✓•Business a strong management team
able to integrate cultures
•Significant economies of scale and scope are achievable
Define Economies of scale (EoS) - Answers✓✓The benefits to a business, in the form of lower
average unit costs, from increasing the size of operation
Type of economy: Purchasing - Answers✓✓Bigger business (powerful)> supplier = neogatiate
discounts/ longer periods of trade credit/reduced average cost/flexible design
specification/delivery arrangments
Type of economy: technical - Answers✓✓Bigger organsiation = more advanced/sophisticated
technology they are able to afford.
= aid in + productivity and - average costs
22/11/2024 12:41PM
AQA A level business 3.9 Exam Questions
and Answers
Define Growth - Answers✓✓when there is an increase in the size of an organisation's
operations
Growth occurs in terms of ... x3 - Answers✓✓Physical assets (i.e. purchasing new premises)
Number of employees
Increasing product range
Reasons for growth X2 - Answers✓✓Enter into new markets - spread risk
Gain economies of scale and reduce costs
Define Retrenchment - Answers✓✓when there is an reduction in the size of an organisation's
operations
Reasons for retrenchment x2 - Answers✓✓Focus on core competences - reduces loses or sell
off less profitable parts of the business
Increase efficiency
Types of growth x2 - Answers✓✓Organic growth
External growth
, ©Themoon EXAM SOLUTIONS
22/11/2024 12:41PM
Define organic growth - Answers✓✓when an organisation increases their sales through
expanding the scope of their internal operations
Organic growth examples include x2 - Answers✓✓Expanding the current asset base (buying
new factories or premises from where to operate)
Increasing the product range
Organic growth is funded through x3 - Answers✓✓Retained profit
new share issue
Loan capital
Define external growth - Answers✓✓when an organisation increases their sales through
integrating with other businesses
External growth examples x2 - Answers✓✓Mergers
takeovers
External growth funded through - Answers✓✓External sources of finance
Organic growth pros x2 - Answers✓✓abality to maintain culture , management style , brand
image and USP
Potentially less risk then external growth
Organic growth cons x2 - Answers✓✓Can be slower then external growth
Risk of missing out on opportunities in fast growing market
, ©Themoon EXAM SOLUTIONS
22/11/2024 12:41PM
Organic growth most appropriate when x2 - Answers✓✓Business has USP and strong brand
image
Business has a unique culture
External growth pro x2 - Answers✓✓Gain synergies and economies of scale
Reduce level of competition
External growth cons x3 - Answers✓✓•Difficulties of merging two companies - cultures and
systems
•Impact on motivation - job losses, reorganisation of work and uncertainty
•Buying another organisation's liabilities
External growth most appropriate when x2 - Answers✓✓•Business a strong management team
able to integrate cultures
•Significant economies of scale and scope are achievable
Define Economies of scale (EoS) - Answers✓✓The benefits to a business, in the form of lower
average unit costs, from increasing the size of operation
Type of economy: Purchasing - Answers✓✓Bigger business (powerful)> supplier = neogatiate
discounts/ longer periods of trade credit/reduced average cost/flexible design
specification/delivery arrangments
Type of economy: technical - Answers✓✓Bigger organsiation = more advanced/sophisticated
technology they are able to afford.
= aid in + productivity and - average costs
