Business 2.3.1 - Ways to improve profits + profitability
- Created by: biggestdrakefan
- Created on: 09-05-21 08:52
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To increase profits, a business must:
- Increase revenue
- Decrease costs
- Do a combination of increased revenue and decrease costs
To increase revenue, the business may consider the marketing mix:
- Changes to the product may mean it looks more appealing to customers
- Changes to promotion may make customers more aware of the benefits
- Better distribution may make it more available
The business needs to be careful that rising costs do not swallow up the rise in sales revenues.
To reduce costs the business may examine many of the functional areas:
- Could they continue with lower costs?
- Could money be saved by switching suppliers?
- Do the firm's sales really benefit from sponsoring the opera?
- Are there ways of reducing wastage?
A business should look for ways of making the product more efficiently…
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