Business 0450 · IGCSE · Enterprise, business growth and size
Enterprise, business growth and size — practice question
PKN makes glass. Supporting sustainable development is significant for the business. PKN operates factories in 30 countries and employs 27 000 people. The Managing Director recognises that globalisation has helped PKN. She intends to enlarge the business through external growth. Retained profit is one possible source of finance a business could use to pay for expansion. Some of PKN’s directors worry that diseconomies of scale could arise as the business becomes larger.
(a)[2]
Identify two methods of external growth that a business might use.
(b)[2]
Identify two reasons for globalisation.
(c)[4]
Outline two ways PKN could help sustainable development.
(d)[6]
Explain two diseconomies of scale that could affect PKN as it grows.
(e)[6]
Do you think the advantages of using retained profits to finance business expansion are greater than the disadvantages? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Horizontal integration method” …