Reasons for Business Growth
- Created by: j3ss.br0wn
- Created on: 01-03-18 14:19
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- Reasons For Growth.
- Economies of Scale.
- Larger businesses can produce products at a LOWER AVERAGE COST
- They can pass on these ECONOMIES OF SCALE to customers as LOWER PRICES.
- This can help to increase SALES, MARKET SHARE and PROFITS.
- Larger businesses can produce products at a LOWER AVERAGE COST
- Diversification.
- Larger businesses can produce MORE PRODUCTS.
- This means that they can sell into DIFFERENT MARKETS.
- REDUCES THE RISK in a decline of sales.
- Larger businesses can produce MORE PRODUCTS.
- Less of a threat to profits.
- REDUCES THE RISK in a decline of sales.
- Financial Support.
- Larger businesses are LESS LIKELY to go BUST.
- This is mainly because they can BORROW MONEY from banks more easily.
- Easier to survive CASH FLOW PROBLEMS.
- They are also more likely to receive financial support from the GOVERNMENT.
- (As they employ more people).
- This is mainly because they can BORROW MONEY from banks more easily.
- Larger businesses are LESS LIKELY to go BUST.
- Personal Vanity.
- Some may enjoy the POWER and STATUS of a larger business.
- Domination of the Market.
- The LARGER the MARKET SHARE the MORE CONTROL on PRICE it has.
- It will face FEWER THREATS.
- (It may even be able to ELIMINATE competition.)
- Economies of Scale.
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