Enterprise, business growth and size

Si and Ramon are friends. They are planning to start a photography business that would take pictures at weddings, birthdays and other special events. The business is to be run as a partnership. From their primary market research, Si thinks there is enough demand. Ramon has drawn up a business plan showing that $8000 is needed for a shop and $4000 for equipment. They intend to spend $500 on promotion, but they cannot agree on the best method to use.

May/June 2015

Identify and explain four economies of scale DH could gain when it takes over a rival.

May/June 2018

Kate is an entrepreneur. Two years earlier, she resigned from her role as a fashion designer at a multinational company. She launched BBB, a women’s sportswear clothing business. BBB aims at a market segment of high income consumers. BBB’s products are sold in 3 retail shops and also via its website. Kate said: ‘I spotted a gap in the market and decided to take the risk. Securing the finance I needed from the bank was not easy. I enjoy making decisions such as choosing leaflets to advertise the clothes.’ BBB’s revenue target for next year is $500 000.

May/June 2019

BKH is a sizeable public limited company. It has 2 000 employees working across 18 sites. BKH offers a range of insurance products, including house insurance and car insurance. BKH’s shareholders want the business to raise profit. The Managing Director understands that raising profit can clash with the aims of other stakeholder groups. She said: ‘Businesses in the private sector pursue objectives that are different from those of public sector organisations.’ BKH is also planning to grow by taking over another insurance company.

May/June 2021

Explain four reasons why governments may support business start-ups.

May/June 2022

Gloria runs a sole trader business that offers house-cleaning services. She communicates with her 4 employees by telephone. She wants the business to grow by adding a repair service. Gloria intends to carry out some market research. She has been advised that writing a business plan may lower risk. Gloria also wants a lighter workload and is thinking about bringing in a business partner.

May/June 2023

PKN produces glass. Supporting sustainable development matters to the business. PKN runs 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 finance source that a business may use to pay for expansion. Some of PKN’s directors are worried that diseconomies of scale may emerge as the business becomes larger.

May/June 2025

Hal aims to become a successful entrepreneur. He is planning to resign from his job and open a bakery. The bakery will be run in the private sector. The business will involve several stakeholder groups. Hal has been advised that a new business must choose a suitable source of start-up capital. He also understands that new businesses face a higher chance of failure.

May/June 2025

Identify and explain one advantage and one disadvantage to CC of having skilled workers employed in the factories.

Oct/Nov 2015

Identify and explain two reasons why added value matters to P & P.

Oct/Nov 2016

As Ghaziz and Jasmin intend to grow their business, identify and explain one economy of scale and one diseconomy of scale that could arise as the business expands.

Oct/Nov 2016

Ella has recently finished college and plans to launch her own business. She has created a new bicycle light with a safety feature that is absent from rival products. Ella realises that securing finance will be hard. She intends to have the lights made in another country. It will cost $8 to make each light. Ella is unsure whether to use price skimming. She said: ‘I have received orders for 300 lights and I have not even started promoting them’. Ella wants to become a successful entrepreneur.

Oct/Nov 2017

Identify two ways in which the size of AH may be measured. Explain the weaknesses of each measure.

Oct/Nov 2017

Filltum is the name of a chain of vegetarian restaurants. It runs 28 restaurants, and 16 of them are operated by franchisees. The Managing Director is satisfied with the rapid pace of growth at a time when many firms are going out of business. She commented: ‘Having a well-motivated workforce is important to our success.’ Every new employee receives on-the-job training. Filltum intends to add 10 more restaurants over the next year. The Managing Director must choose between selling extra franchises or opening its own restaurants.

Oct/Nov 2018

DSY is a private limited company. It manufactures washing machines and cleaning equipment. The Managing Director wants DSY to enter a different market. He intends to invest $2bn in developing electric cars. Competition in the electric car market is intense. This market is expanding very quickly. A leading pressure group has highlighted the environmental issues caused by non-electric cars. The Managing Director is aware that important choices still need to be made about the method of production and the brand image of the new car.

Oct/Nov 2020

EQR operates 150 cafes. It offers a variety of drinks, coffee included. Being ethical matters to EQR. The Managing Director has been reviewing EQR’s statement of financial position. The business aims to raise its market share. The Managing Director intends to expand by selling franchises for $85\,000$. She is also considering methods of increasing added value.

Oct/Nov 2022

BHA sells clothing. It is a multinational company. BHA employs 2100 people and operates in 5 countries. In the previous year, BHA’s profit reached $90$ million. The owners of BHA want the business to expand, but the Managing Director is worried about the difficulties this could create. The Managing Director has found out that one of BHA’s suppliers uses child labour. She must judge whether changing supplier is the best response to this ethical issue.

Oct/Nov 2022

Explain one benefit and one drawback to Tokumbo of operating as a sole trader.

Oct/Nov 2022

Desmond aims to become a successful entrepreneur. He has chosen to give up his office job and launch a gardening business that cuts grass and plants flowers. It will operate as an unincorporated business. Desmond knows that a new business faces a higher chance of failure than one that is already established. He has worked out his business objectives for the first year. Desmond has worked out that he will need $750 as start-up capital.

Oct/Nov 2023

Explain two benefits of PH’s employees joining a trade union.

Oct/Nov 2023

Mitchell is an entrepreneur who plans to launch a business selling books. As part of his business plan, Mitchell has completed some market research. An extract is shown in Fig. 2.1. Mitchell will use microfinance as a source of finance. He wants to find out whether the opportunities from using ecommerce for a new business are greater than the threats. Extract from Mitchell’s 2023 market research data Chart 1: Categories of people who read books Children 35% Students 18% Adults 20% Older people 27% Chart 2: Book sales by type (million) Electronic books 20 Audio books 10 Paperbacks 50 Hardbacks 15

Oct/Nov 2024

Explain four factors that could cause a business to stay small.

Oct/Nov 2024

BEI is a multinational firm that makes aeroplanes. Quality assurance matters to BEI. It employs 5000 people. BEI’s directors have announced plans to shrink the workforce (downsize). The Human Resources Director is deciding which employees should be made redundant. Details of employee A are given in Table 1.1.

Oct/Nov 2025

DJU makes clothing such as jeans and trousers. Its factory has 90 employees. DJU applies specialisation when producing its goods. The Managing Director is examining DJU’s cost and output figures. An extract is given in Table 4.1. She wants to find out how lower interest rates could influence the business. DJU’s directors are looking at different ways a business may grow, including taking over a competitor.

Oct/Nov 2025