Business growth — internal & external
AQA GCSE Business Studies revision on Business growth — internal & external. Aligned to the AQA GCSE Business 8132 specification. This bank has 10 practice questions on this topic.
Sample questions (3 of 10)
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Question 1
Two businesses in the SAME industry combining is called...
- A) Vertical integration
- B) Horizontal integration
- C) Diversification
- D) Franchising
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Answer: Horizontal integration
Horizontal integration: two supermarkets merge. Vertical integration: a supermarket buys its supplier (backwards) or its delivery firm (forwards). Diversification: a supermarket buys a tech company. Horizontal is the most common GCSE example.
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Question 2
Economies of scale mean that as a business gets bigger...
- A) Total costs fall
- B) Cost per unit falls
- C) Profit always rises
- D) Demand always rises
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Answer: Cost per unit falls
Bulk buying, specialisation, financial economies (cheaper loans), better tech — all reduce cost PER UNIT as output rises. Total costs go up (more raw materials etc.) but cost-per-unit falls. The opposite (diseconomies of scale) happens when a business gets too big to coordinate.
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Question 3
A supermarket buying a farm that supplies its vegetables is an example of...
- A) Horizontal integration
- B) Backward vertical integration
- C) Forward vertical integration
- D) Conglomerate diversification
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Answer: Backward vertical integration
Backward = up the supply chain (toward raw materials). Forward = down (toward the customer). A clothing brand buying a chain of shops is forward. Pros: control over supply, capture more margin. Cons: capital tied up, less flexibility — what if you stop wanting carrots?
Want to test yourself on the remaining cards for this topic?
7 more questions on Business growth — internal & external — plus mistakes tracking and spaced repetition across the whole Business Studies spec.