1.10: Small Firm Survival Flashcards
Why are there so many small firms
They are easy to set up, start up costs are relatively low and if they are setting up as a sole trader then no paperwork is required.
Why do small firms struggle to survive
Small output = no economies of scale, Difficulty raising finance, Lack of Brand Awareness, Higher Priced Items and Other Costs
How do small firms survive
They can survive if demand for a good is limited, this may be because of the different variety of designs, personal service, market type (normally niche) and location
Can small firms gain economies of scale
Yes, they can by becoming a co-operative with another firm for example a grocer and a wholesaler
How can small firms be of use in manufacturing
Many of the parts and components used in final large assembly plants are made by small firms as they are able to meet the demand
How can technical factors be of an advantage to small firms
Advances in tech have reduced the prices of some specialist equipment, making it easily affordable for small firms
Why is flexibility an advantage
Because they can adapt fairly quick in changes in demand and customer requirements which makes the decision process a whole lot quicker
Why does a business have to consider its stakeholders when planning change
Because stakeholders are people who have an interest in a business they obviously liked the business to be a stakeholder, change has to be carefully managed to keep these groups on side
