GCSE AQA Business Studies Unit 2: Effects of Expansion on Stakeholders

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Effects of Expansion on... Shareholders
Benefit from increased profit. Possibly asked to buy more shares & invest more money to help business expand further. As business grows there'll be more shares. Power of smaller shareholders is reduced. Smaller shareholders group to gain influence.
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Effects of Expansion on... Employees
Benefit from greater job security as larger business is less likely to fail. Larger firms are more likely to be hierarchical - employees feel less involved. Likely to join trade union to protect their interests.
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Effects of Expansion on... Customers
Lower priced products. Larger the firm > less competitors > able to increase prices do to none to compete with. Individual customers are powerless.
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Effects of Expansion on... Government
Collect more taxes as business becomes larger. Can be harder for Government to pass laws that threaten interests of the business. Government can investigate if large firms are working in an anti-competitive way.
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Effects of Expansion on... Local Community
Noise pollution/traffic congestion. Businesses profits could be reinvested back into community. Jobs are created. Local community protect their interests by forming pressure groups.
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Effects of Expansion on... Suppliers
Benefit from increased sales as larger firm needs to buy more supplies. Suppliers in weaker position when negotiating prices as their competitors will want to supply the firm.
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Growing through Franchising
A good way to increase brand awareness and the market share of a firm's products without the usual costs/risks. Firm can achieve greater economies of scale. They benefit from increased sales of product. Franchisor saves money on wages and other cost
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Other cards in this set

Card 2

Front

Benefit from greater job security as larger business is less likely to fail. Larger firms are more likely to be hierarchical - employees feel less involved. Likely to join trade union to protect their interests.

Back

Effects of Expansion on... Employees

Card 3

Front

Lower priced products. Larger the firm > less competitors > able to increase prices do to none to compete with. Individual customers are powerless.

Back

Preview of the back of card 3

Card 4

Front

Collect more taxes as business becomes larger. Can be harder for Government to pass laws that threaten interests of the business. Government can investigate if large firms are working in an anti-competitive way.

Back

Preview of the back of card 4

Card 5

Front

Noise pollution/traffic congestion. Businesses profits could be reinvested back into community. Jobs are created. Local community protect their interests by forming pressure groups.

Back

Preview of the back of card 5
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