Business Studies
Enterprise and planning — Topic 1
- 1.
A new business sets the objective 'to increase annual revenue by 10% within two years'. This is best described as: A A mission statement B A stakeholder C A SMART objective D A diseconomy of scale
[1 mark] · no calculator - 2.
Explain one reason why an entrepreneur starting a new business faces risk.
[2 marks] · no calculator - 3.
Explain one benefit and one drawback to a business owner of writing a business plan before starting up.
[2 marks] · no calculator - 4.
Which is an example of an internal economy of scale for a large manufacturer? A Paying a higher price per tonne of raw material B Bulk-buying raw materials at a lower price per unit C Losing communication efficiency between departments D Higher average distribution cost per unit
[1 mark] · no calculator - 5.
Explain one reason why a business might suffer a diseconomy of scale as it grows very large.
[2 marks] · no calculator - 6.
A local coffee shop owner is considering becoming a franchisee of a national coffee brand instead of continuing independently. Explain one advantage and one disadvantage of this for the owner.
[2 marks] · no calculator - 7.
A successful local bakery chain wants to grow. Analyse one advantage of growing organically (opening new branches itself) compared with growing by taking over a rival bakery.
[3 marks] · no calculator - 8.
A small business owner has $50,000 saved. She can use it to expand her existing shop, or use it as a deposit to buy a franchise of a well-known brand in a new location. Recommend one option using two relevant factors.
[3 marks] · no calculator - 9.
Discuss whether 'maximising profit' is likely to be the most important objective for a newly-established small business in its first year of trading.
[4 marks] · no calculator