
External Growth Methods
Quiz by Paul Adams
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10 questions
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- Q1A distinguishing feature of a joint venture is that:Joint ventures are significantly less risky than takeoversRisks and rewards are shared by the partiesThe joint venture business cannot be soldBoth parties to the joint venture share the profits equally30s
- Q2The most likely reason for the takeover by a leading supermarket chain of a close competitor would be:To increase buying power of suppliersTo spread risk by diversificationTo secure better distributionTo increase market share30s
- Q3Which of the following is most likely to result in greater economies of scale?Merger of two startup online businessesTakeover of a small wholesaler by a large retailerMerger of two leading hotel chainsTakeover by a UK retailer of a retailer in China30s
- Q4A business acquiring control of another. This is known as a:TakeoverMergerJoint VentureExternal investment30s
- Q5The takeover by a supermarket chain of a key supplier is an example of:Forward vertical integrationConglomerate integrationBackward vertical integrationHorizontal integration30s
- Q6The likely drawback of internal growth compared with external growth is:Growth will be riskier using internal methodsGrowth will be slower using internal methodsGrowth will be faster using internal methodsGrowth will be riskier using external methods30s
- Q7Which one of the following is an example of an external method of growth?A franchisor expands the product rangeA franchisee opens a new location nearbyA franchisor increases the rate of royalty payments due from franchiseesA franchisor buys the business of its largest franchisee30s
- Q8Conglomerate integration is closely linked with the strategy of:Cost leadershipMarket penetrationDifferentiationDiversification30s
- Q9Which of these is an example of horizontal integration?Takeover of a manufacturer by a retailerMerger of two competing manufacturersTakeover of a raw material supplier by a manufacturerJoint venture between an online retailer and supplier30s
- Q10A key reason why takeovers often fail is that:Competitors increase prices as a result of the takeoverAchieved cost saving are lower than expectedCompetitors lose customers to the businessAchieved cost savings are greater than expected30s