Take this Exam: GCSE Business: Growth, Competition and the Market | Zestly

Question 1

A small, independent toy shop competes with a massive national retailer by offering personalised gift-wrapping and expert advice that the larger store does not provide. Why is this strategy safer than competing on price?

Accepted Answer

It creates a unique selling point that makes the shop less vulnerable to price wars.

Answer

It ensures the shop has the lowest unit costs in the industry.

Answer

It guarantees the shop will have the highest market share.

Answer

It eliminates all competition from the larger retailer.

Question 2

A local clothing boutique decides to launch an e-commerce website to sell its items globally. What is a realistic challenge the boutique will face with this new venture?

Accepted Answer

Increased competition from businesses all over the world.

Answer

A total reduction in the need for customer service.

Answer

The elimination of all delivery and return costs.

Answer

An automatic increase in the boutique's local footfall.

Question 3

A rapidly growing start-up receives a huge influx of orders, but it must pay its suppliers and staff immediately, while its customers do not pay for sixty days. What is this cash flow problem called and what might ease it?

Accepted Answer

Overtrading; negotiating better payment terms with suppliers

Answer

Market saturation; reducing advertising

Answer

Economies of scale; increasing production

Answer

A takeover; merging with a rival

Question 4

A domestic manufacturer of kitchenware faces competition from a new, much cheaper imported product. What is the most realistic strategy for the domestic firm?

Answer

Raise prices to signal that the product is of higher quality.

Answer

Only cut costs to match the import price.

Answer

Improve product quality or service while also seeking ways to cut costs.

Answer

Ignore the import and hope customers remain loyal.

Question 5

A small jewellery maker identifies a specific group of customers who want eco-friendly, recycled materials and designs a product line specifically for them. Why is this approach effective for a small firm?

Answer

It ensures the firm will always have the lowest prices.

Answer

It allows the firm to focus its limited resources on a group that is currently underserved.

Answer

It guarantees that the firm will become a large multinational corporation.

Answer

It allows the firm to ignore all other market segments.