Edexcel International GCSE in Business Studies. Topic 5 Production. Name: Production Turner Education

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1 Topic 5 Production Name: Production Turner Education

2 Contents A Economies and Diseconomies of Scale 3 B Methods of Production 17 C Productivity 25 D Quality 40 Production Turner Education

3 Businesses may expand in a number of ways ranging from taking on additional staff, increasing their product range to possibly opening up more outlets overseas. Why do you think a business owner would want to expand? Extension: Describe what the main reasons could be for a business choosing to not expand. Production Turner Education

4 What is meant by the term market share? How can a business attempt to increase its market share? Extension: Describe why you feel the UK Government do not allow businesses to gain monopolies in their markets. Production Turner Education

5 What is meant by the term brand awareness? How can a business increase its brand awareness? Extension: Explain the financial importance to a business of generating brand awareness of their products. Production Turner Education

6 Will expanding a business always be beneficial to the owners? Potential benefits to the owners Potential drawbacks to the owners Your recommendation based on what you have said previously Production Turner Education

7 Using examples, explain what is meant by organic (internal) growth What are the benefits to a business of expanding organically? Extension: Describe why some businesses may not choose to expand organically. Production Turner Education

8 McDonalds have shown that growing their business by allowing others to franchise their name can be an effective method of expansion. List some potential positives and negatives of this strategy. + - Extension: Describe if you think the franchisor should adopt a centralised or decentralised approach. Production Turner Education

9 Explain what is meant by inorganic (external) growth What are the benefits to a business of expanding inorganically? Extension: Describe why some businesses may choose to not expand inorganically. Production Turner Education

10 In 2011, Microsoft completed a takeover of Skype (who were making a loss) in a deal worth around 5.2 billion. Outline some potential positives and negatives of this strategy. + - Extension: Describe why you feel Skype failed to make a profit despite having a lot of users. Production Turner Education

11 Try and fit the correct type of inorganic growth on the diagram below: Diversification Vertical forward integration Horizontal integration Vertical backward integration Production Turner Education

12 Try and match the type of inorganic growth to the correct definition and example. Joining two businesses in different industries. Diversification Vertical forward integration Horizontal integration Vertical backward integration Joining two businesses in the same industry but a different stage of production, towards the customer. Joining two businesses in the same industry but a different stage of production, towards the supplier. Joining two businesses in the same industry and stage of production. e.g. a computer manufacturer s takeover of a microchip maker. e.g. a farmer s takeover of a butcher s shop. e.g. a soft drink manufacturer merges with a fashion retailer. e.g. two car mechanics. Production Turner Education