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Economies of scale
Economies of scale are gained when an increase in production causes a
decrease in production costs. Aka Economies of scale are the cost
advantage from business expansion.
Marketing economies of scale
Businesses can save in expenses associated with marketing such as
advertising and distributing aka marketing economies from spreading the
fixed cost of promotion over a larger level of output,.…read more

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Large businesses, in general, provide better security and fewer risks for
banks therefore banks are willing to allow them to borrow larger sums for
longer periods of time and at better rates.
Main way in which a business may grow
Businesses may either grow internally (organically) or externally.
Internal (organic) growth
Internal growth takes place inside the business, and without any reference to
other businesses.
Internal growth is slow to achieve and a gradual process.…read more

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The firms may or may not be working on the same level.
This type of merger is also known as DIVERSIFICATION, and it takes place
mainly because the firm is expecting a decline in one of its markets and it is
branching out into other lines as a safeguard.
How will the different methods of growth affect the
business? Advs/disadv
Methods of
Internal This is very slow and gradual.…read more

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The owner is seen as a manager
rather than an owner.
Takeover New firm is likely to control Strained relationship at
UNFRIENDLY greater success as a result managerial level and compulsory
of being part of a larger control by an outside company.
Merger Increase in business comes Methods have to be worked out
from a larger operation whereby two workforces and two
resulting in economies of sets of managers can work as one
scale and greater profits. ­ takes time.…read more

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Social and right implications of growth
MORAL: Modern trend in grocery and hardware items is through large supermarkets
situated on the edge of town. These large supermarkets offer competitive prices and a
wide variety of goods. They have large car parks with free parking all this contributes to
the success and growth of the large supermarkets. Small, traditional retailers in town
centres and villages cannot compete with the prices and selection the large stores offer.
Many small retailers are struggling in this economic climate.…read more



This is a large and comprehensive set of notes about how businesses expand. There is more detail than might be needed for some of the boards so students should check their exact exam board requirements. I would recommend adapting the information into a more personal form eg produce your own flash cards, mind map etc.

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