Unit 2: Business Organisation

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  • Created by: jj_123
  • Created on: 28-04-15 19:13
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  • Unit 2: The Business Organisation
    • Reasons for expanding business
      • Increase Sales
      • Increase Market Share
      • Take advantage of economies of scale
    • Reasons for not expanding a business
      • To keep control
      • To avoid too much risk
      • To offer a personal service to customers
    • Economies of scale: The reason why average costs of each item fall as a firm expands
    • Main Methods of Internal Expansion
      • Produce more of current products
      • Current products into new markets
      • Launch a new product
      • Internet Selling
      • Offer franchises to other businesses
    • A merger is when two firms join together to form a new firm.
    • A takeover is when an existing firm expands by buying another firm
      • Mergers and takeovers do not always go successfully
    • Main object will change to becoming and staying profitable.
    • Multinational Firms
      • Producing in various countries keep transport costs down
      • Increase knowledge of local market
      • Access cheap labour
      • Can create employment for locals
      • May drive out local industries

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