CAIE IGCSE Business Studies 1.3.3 business growth or staying small
Practise growth questions by explaining benefits or risks, applying them to the case and making a justified judgement where asked.
- Syllabus
- 2027–2029
- Course
- Business 0264
Exam points
- Explain why owners may grow or stay small using control, profit, risk or personal objectives.
- Apply takeover benefits and problems to assets, employees, markets or communication issues.
- Justify whether growth is suitable by weighing case evidence rather than listing advantages.
1.3.3—Why some businesses grow and others remain small question 1
[Maximum number: 4]
WMH is a business which operates in the secondary sector. It makes furniture including tables and chairs. WMH's employees are all members of a trade union. The Managing Director knows the business is likely to remain small. She is considering introducing new technology into WMH's factory. She also knows it is important for a manufacturing business to choose a suitable location for a factory.
Identify four reasons why a business might remain small.
Reason 1:
Reason 2:
Reason 3:
Reason 4:
Award 1 mark per reason (max 4).
Points might include:
- Limited access to/lack of capital (to expand)
- Limited access to/lack of suitable labour
- Limited access to/lack of suitable land
- Limited access to/lack of suitable resources/raw materials
- Personal preference / owners' choice / owner does not want the responsibility / wants to keep control
- Lack of skills/knowledge/experience (to expand)
- Size of the market / amount of customers / level of demand / small market
- To maintain close customers relationships / provide a personal service / type of industry
- Some large firms dominate the market / low market share / too much competition
- Can be flexible / respond quickly to changes in customer tastes
- No economies of scale / to avoid diseconomies of scale
- Operating at maximum possible output
Other appropriate responses should be credited.
Only award the first four responses given.
Do not award vague statements such as less stressful/have more free time/less likely to have communication issues.
All question bank results loaded