Better access to raw materials – A manufacturer can merge/takeover their supplier of raw materials through vertical backwards integration. Exam boards: AQA, Edexcel, OCR, IB, Eduqas, WJEC Organic (or internal) growth involves expansion from within a business, for example by expanding the product range, or number of business units and location. The Pearson Edexcel Level 3 Advanced GCE in Business is structured into four themes and consists of three externally examined papers. For example, a supermarket chain relies on high levels of consumer spending for their business to thrive. This may be done either internally (organically) or externally (inorganically). This can result in a negative cash flow, whereby the business is profitable but if has not broken even from the initial investment. Whilst the business is operating with a negative cash flow it'll require a source of finance to pay key stakeholders and maintain its day to day business activities. Helps to avoid diseconomies of scale – By growing organically it allows the business to grow at a more sustainable pace. retailers). Reducing competition – One of the big benefits of merging/taking over a business in the same industry and at the same stage in the production process is that it reduces competition. Organic growth can exist through a number of different ways such as increased output, expanding into international markets, launching new products etc. For example, if there was only one dominant business within a market then they are likely to be able to set prices at extortionate rates as consumers have little other option but to buy their goods/services from them as there is no or inadequate alternatives. Again, this can lead to inefficiency within the business, causing costs to increase. Start studying Edexcel GCSE Business (9-1) Key Terms: 2.1 Growing the business. a business may withdraw from a market if it is no longer profitable for them External growth (inorganic growth) usually involves a merger or takeover. Therefore, during times of increased demand the manufacturer is able to increase their supply of raw materials e.g. Access to finance – The smaller the business is, the harder it is for them to access finance. Distinguish between forward, vertical and conglomerate integration, and know reasons for mergers/ takeovers. 6BS01 : Question Paper Solution: Mark Scheme. Helps to avoid diseconomies of scale – By growing organically it allows the business to grow at a more sustainable pace. There is a checklist for each subtopic to ensure you will miss no part of the specification. Edexcel A Level Business Studies Past Papers. This is due to the fact that most of the business growth will often be done through loans. Created: Dec 28, 2020. 6BS02 : Question Paper Solution: Mark Scheme. The incompatibility between the two businesses can lead to increases in costs of production which may force the price of their goods/services upwards. This means that the acquisition of that business will force the customers that it once had, to shop elsewhere, some of whom will shop at the business that took it over/merged with it. These sample assessment materials have been developed to support this qualification and will be used as the benchmark to develop the assessment students will take. ©EzyEducation Ltd 2020. AS Business Studies: Unit 2A – Managing the Business (6BS02) - Download Past Paper - Download Mark Scheme. P v 3 1 2014 2014 2. As a result of this, both their current and non-current liabilities are likely to increase. Visit author shop. in the first year or in times of economic downturns a business is likely to focus on survival, later on they may focus on growth Entering or exiting markets e.g. Through conglomerate integration the business no longer has to rely on the performance of one market alone. Advantages of external growth include: competition can be reduced. Conglomerate integration – Business’s may also decide to expand through merging or taking over a business in another industry to what they’re in. 2.1 Growing the business 23 2.1.1 Business growth 23 2.1.2 Changes in business aims and objectives 23 2.1.3 Business and globalisation 23 2.1.4 Ethics, the environment and business 24 2.2 Making marketing decisions 24 2.2.1 Product 24 2.2.2 Price 25 2.2.3 Promotion 25 2.2.4 Place 25 2.2.5 Using the marketing mix to make business decisions 26 The *GCSE Smash Pack* is available for the following specifications: AQA, Edexcel, OCR, WJEC and Eduqas. Specifications (current): Business Studies 6BS01 Course Specification (current) June 2016. Economies of scale – By merging/taking over another business, it will allow for increased outputs as the output of the original business and the one they’re merging with will now be combined. By doing so they’re able to reduce their costs of production, allowing them to offer their goods/services at lower prices, thus increasing their competiveness within the market. This will result in a lack of working capital to pay off current liabilities. June 2015. As a result of this, the business can reduce the number of staff they employ and therefore reduce the amount of money that they spend on staff wages. Read more. Edexcel AS Business 1.1.1. Slow growth – The reduction in the rate of growth can also be a disadvantage. The business that is being taken over/merged with was once a competitor that had a certain share of the total sales revenue in the market. … By doing so they may increase their costs of production, thus reducing their profit margins and therefore potentially they’re overall profit. As a result of this, there is less chance of the business experiencing increased costs as a result of diseconomies of scale. By growing organically it will take longer for the business to increase its market share, by which point their competitor that has grown through a merger/takeover may be dominating the market. Edexcel A2 Business Theme 4 Trading Blocs 1. from opening more branches. This is when a business takes over or merges with another business that is a step behind them in the production process e.g. This help them experience the benefits that are derived from increased output such as, lower borrowing costs and being able to spread marketing costs over a larger output. Edexcel A-Level Business Studies Past Papers June 2016. This is due to the fact that start-up or small businesses are much more of a risk than established businesses. As a result of this, they may be able to change the supplier’s business model in order to make them more efficient. As a result of this, there is little room for the business to expand and therefore there is less chance of them experiencing economies of scale. This is mainly done through the integration of the departments in the different businesses. This can give businesses the chance to expand into different markets which they may have struggled to compete in through organic growth. Read more… Parts 2&3 of APT’s Companion for Edexcel AL Business Paper 3 2021 Context PUBLISHED. a clash of business cultures. As a result of this, they may make poor decisions and are unable to attract new customers. Presentations on Business Growth (A Level Edexcel Business Studies) (no rating) 0 customer reviews. 3.2.1 - Growth a) Objectives of growth: to achieve economies of scale (internal and external) increased market power over customers and suppliers ; increased market share and brand recognition ; increased profitability ; b) Problems arising from growth: diseconomies of scale ; internal communication ; … Exam boards: AQA, Edexcel, OCR, IB. 3.1 Business growth: 3.1.1 Sizes and types of firms: a) Reasons why some firms tend to remain small and why others grow b) Significance of the divorce of ownership from control: the principal-agent problem c) Distinction between public and private sector organisations d) Distinction between profit and not-for-profit organisations: 3.1.2 Business growth This is a complete set of detailed notes you will need for AS level Edexcel Economics A Unit 3.1 Business growth.