Expanding a business — AQA GCSE Business
Test yourself on Expanding a business with AQA GCSE practice questions.
7 days Premium · Then the free plan continues · No card, no charge
Expanding a business explained
Methods of expansion cover how a business grows.
Read the full explanation
Internal (organic) growth uses a firm's own resources, such as opening new outlets or expanding via e-commerce to reach global markets. External growth involves integration through mergers or takeovers. Expansion can also occur through franchising, where a franchisor allows franchisees to trade under its brand for a fee, enabling rapid growth with less capital. Outsourcing involves paying another firm to perform tasks (e.g. manufacturing), allowing the business to focus on core activities and expand capacity. You must explain these methods, apply them to contexts, and evaluate their benefits (e.g. economies of scale) against drawbacks (e.g. loss of control in franchising or outsourcing).
Your focus
- Describe internal and external methods of expansion, including e-commerce, mergers, and takeovers.
- Explain how franchising and outsourcing facilitate business expansion.
- Evaluate the most suitable expansion method for a specific business context.
Expanding a business exam tips
Marking Points
- Explain internal growth methods, including e-commerce and opening new outlets.
- Explain external growth through mergers and takeovers (integration).
- Analyse franchising as a method of expansion, noting the balance of rapid growth against loss of brand control.
- Analyse outsourcing as a way to expand capacity by delegating non-core tasks to third parties.
- Evaluate the suitability of expansion methods for a given business context, weighing benefits against costs and risks.
Examiner Tips
- 💡When evaluating franchising, contrast the rapid, lower-cost expansion for the franchisor with the risk of franchisees damaging the brand's reputation.
- 💡Use connectives like 'because' and 'therefore' to build chains of reasoning when analysing the impacts of e-commerce or outsourcing.
Common Mistakes
- Confusing franchising with a merger; correction: franchising involves selling the right to use a brand, not combining ownership.
- Forgetting e-commerce as an expansion method; correction: explicitly mention selling online as a way to reach new markets organically.
- Assuming outsourcing is only for cost-cutting; correction: recognise it as a method to expand capacity without heavy capital investment.