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Expanding as a business V. GCSE Business studies Unit 2 Topic 6. Mr G’s bumper business game show. Game show rules. Teams of two or three One person to scribe Must give as many answers as possible to a question
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Expanding as a business V GCSE Business studies Unit 2 Topic 6
Game show rules • Teams of two or three • One person to scribe • Must give as many answers as possible to a question • For any answers that match my answers your team gets 2 points (1 point for half answers) • An additional answers that I deem as correct your team receives one point • All answers must be written down!
Your specialist subjects • Franchises • Growth & stakeholders • Protecting stakeholders interests
What are the advantages of selling a franchise? • Franchisor gets a fee and % of profits • Franchisee provides most of the finance to set up the new outlet so the business can grow much faster • The franchisee will be motivated to succeed as they receive most of the profit • Franchisees can learn from each other which helps the business improve • As all franchises contribute to marketing, more can be spent to achieve brand awareness
What are the disadvantages of selling a franchise? • The original entrepreneurs no longer own the entire business • If there is a quality or service problem with one franchise, the image of the entire business can be damaged
What are the advantages of growth to stakeholders? (please identify stakeholder) • Employees – job security and greater rewards • Suppliers – receive additional orders • Local community – more people employed by the business • Government – more tax and less benefit claims
What are the disadvantages of growth to stakeholders? (please identify stakeholder) • Supplier – May be bullied by bigger firm • Employees – May not feel part of the business • The business – communication may suffer • The community – the business may relocate (perhaps overseas) • The government – will not receive tax and may have to deal with unemployment if business relocates abroad
How can stakeholders protect their interests? (please identify stakeholder) • Lobby government – Employees, suppliers • Boycott the products – Customers • Strike – Employees • Complain – Employees, suppliers, community, government • Vote or sell shares - Shareholders
Bonus questions • What is organic growth? • Why might a business take over a competitor? • What are diseconomies of scale? • What causes diseconomies of scale? • Give me an example of backwards vertical integration • Define conglomerate integration