Business Objectives and Growth Factors Quiz

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Which internal factor can significantly influence a business's objectives?

Legislation

Competition

Culture (correct)

Market Conditions

What external factor might lead a business to adjust its objectives to remain competitive?

Leadership changes

New technology (correct)

Employee performance

Corporate culture

Which of the following is NOT considered an internal factor affecting business objectives?

Performance

Market Demand (correct)

Leadership

Culture

How can government legislation impact a business's objectives?

By creating new sales opportunities Signup and view all the answers

What consequence might arise due to shifts in market conditions?

An adjustment of profit objectives Signup and view all the answers

Which of the following is a target for a growing business?

Take over other businesses Signup and view all the answers

In a struggling business, which objective is most likely to be prioritized?

Achieve enough sales to break even Signup and view all the answers

Which business objective is associated with an expanding market?

Growth Signup and view all the answers

What might a business aim to do in a negative economic climate?

Retrenchment Signup and view all the answers

Why might a business focus on improving efficiency regardless of the economic climate?

To lower costs and maintain profits Signup and view all the answers

What is a characteristic of internal (organic) growth?

The business introduces new products or enters new markets. Signup and view all the answers

Which method of external growth involves businesses at different stages of production?

Forward vertical merger Signup and view all the answers

How can a business achieve lower costs as a result of growth?

By achieving economies of scale. Signup and view all the answers

What is the primary difference between a merger and a takeover?

A merger is voluntary, whereas a takeover is not. Signup and view all the answers

Which of the following is a potential benefit of entering new markets as a method of internal growth?

Higher sales revenue. Signup and view all the answers

What is an example of a conglomerate merger?

A software company merging with a food production firm. Signup and view all the answers

What role does new technology play in the growth of a business?

It can enhance processes and develop new products. Signup and view all the answers

Which type of merger combines firms that operate at the same stage of production?

Horizontal merger Signup and view all the answers

What is one of the main benefits of globalization for businesses?

Access to technology and resources Signup and view all the answers

How can globalization create challenges for businesses operating internationally?

It introduces foreign competition. Signup and view all the answers

Which of the following describes imports?

Goods and services received from another country Signup and view all the answers

What is a potential drawback of relocating operations due to globalization?

Challenges of adapting to foreign consumer needs Signup and view all the answers

Why might smaller local businesses be threatened by international businesses?

International businesses often provide unique products that local businesses cannot replicate. Signup and view all the answers

What is a primary disadvantage of selling assets to finance growth?

The business loses ownership of valuable resources. Signup and view all the answers

Which of the following is an example of an external source of finance?

Share capital Signup and view all the answers

How does retained profit serve as a source of finance?

It is the safest form of finance as it avoids risk. Signup and view all the answers

What is a potential risk associated with share capital?

Loss of control over the business. Signup and view all the answers

What typically influences the cost of borrowing funds for a business?

The type of financing used and market conditions. Signup and view all the answers

What is one of the fixed responsibilities when a business uses loan capital?

Making regular interest payments. Signup and view all the answers

What could potentially happen if a business cannot meet its loan repayments?

The business could face cash-flow issues. Signup and view all the answers

What is a characteristic of using retained profits for expansion?

It does not require repayment. Signup and view all the answers

What is one primary way a public limited company (PLC) raises capital?

Selling shares on a stock exchange Signup and view all the answers

Why might a business prefer internal financing over external financing?

To maintain control and avoid debt. Signup and view all the answers

Which of the following is a key benefit of becoming a PLC?

Limited liability for shareholders Signup and view all the answers

What is a disadvantage of using loan capital for financing growth?

The requirement for periodic payments. Signup and view all the answers

What is a potential risk faced by public limited companies?

Increased risk of takeover Signup and view all the answers

Which factor may lead to public limited companies negotiating better prices with suppliers?

Their size and market presence Signup and view all the answers

One drawback of being a PLC involves which of the following aspects?

Complex decision-making Signup and view all the answers

How does becoming a PLC affect the decision-making process within the company?

Greater influence of external shareholders Signup and view all the answers

What happens to the level of media attention when a company becomes a PLC?

It significantly increases Signup and view all the answers

What is the effect of becoming a PLC on financial performance transparency?

Decreases financial privacy Signup and view all the answers

What is the primary purpose of imposing quotas on imports?

To restrict the amount of specific goods entering the market Signup and view all the answers

Which of the following best describes protectionism?

Imposing regulations that limit the flow of imports Signup and view all the answers

What is one implication of subsidies for domestic producers?

They increase the competitive edge against foreign producers Signup and view all the answers

Which of the following is NOT a reason for imposing trade barriers?

Preventing a surplus of goods in the domestic market Signup and view all the answers

How does a trade bloc, such as ASEAN, affect member countries?

It promotes trade and may give preferential treatment to members Signup and view all the answers