GCSE Bitesize Business Studies

January 13, 2016
#11 Pin Bbc Bitesize Ks3

Business development features prospective benefits and drawbacks. Some owners tend to be hesitant to make the threat of growing business and opt to stay small.

As a company expands it gains two significant benefits over its smaller competitors. Big companies have significantly more influence over selling price. They're large enough becoming price setters.

a couple of glasses

Huge companies additionally frequently enjoy economies of scale. Which means a company has reduced product expenses due to the large-size. They may be able purchase raw materials cheaply in bulk also spread the large cost of advertising and marketing promotions and overheads across larger product sales.

For instance, if a big firm can produce confirmed style of sunglasses for £20 whilst it costs its smaller competitor typically £30, then larger firm has a £10 per unit are priced at advantage. Larger firms may charge lower costs or enjoy a higher profit margin.

Economies of scale are a major source of competitive benefit for big businesses.

Methods of development

A business can develop in proportions through:

  • Interior (organic) growth: the company develops by employing more staff and gear to increase its [output: the word denoting either an exit or changes which exit a system and which activate/modify a process ].
  • Exterior growth: in which a business merges with or gets control another organization. Incorporating two companies boosts the scale of operation.
  • Franchising: where a small business leases its idea to franchisees. This enables brand new branches to open up across the country and internationally.
Source: www.bbc.co.uk
RELATED VIDEO
GCSE Business Studies Aims and Objectives YouTube
GCSE Business Studies Aims and Objectives YouTube
Business Studies - Enterprise & Entrepreneurship: Business
Business Studies - Enterprise & Entrepreneurship: Business ...
JIT and lean production GCSE Business Studies revision
JIT and lean production GCSE Business Studies revision
RELATED FACTS
Share this Post