2.1 business growth Flashcards
Advantages of organic growth
Less risk
builds on businesses strengths
grow at sensible rate
disadvantages of organic growth
slow
miss opportunities
dependent on market growth
How to target new markets
change the marketing mix
set up branches in other countries
use new tech
How to develop new products and its benefit
increase sales
need innovation
advantages of inorganic growth
reduces competition
international expansion
buying tech
fast
disadvantages of inorganic growth
difficult to control
expensive
management problems
clash of cultures
what is economies of scale
costs increase slower than output, reductions in average unit cost
why economies of scale happen
buy supplies in bulk
more advanced machinery
increased dimensions
what is diseconomies of scale
increases in average unit cost
why diseconomies of scale happen
harder and more expensive
harder to communicate
product processes are too complex
Advantages of being a plc
limited liability
banks more willing to lend money
easier to grow
Disadvantages of being a plc
expensive
has to prepare annual accounts
available for competitors to see
advantages and disadvantages of retained profit
money you own
once its used its gone
advantages and disadvantages of assets
gets rid of unused machinery, already exists
cant sell too many
advantages and disadvantages of loans
instant
pay interest
advantages and disadvantages of share capital
no interest
share of the profit
advantages and disadvantages of floating on the stock market
generates quick profit
people can out buy your business
advantages of tariffs
UK produced goods dont pay
protect new businesses from being swamped
raise tax for government
disadvantages of tariffs
may increase prices for consumer
other countries may raise there tariffs
how e commerce helps to globalize
can sell in other countries over a website
no need to invest in shops
product (globalization)
local tastes
place(globalization)
reliable transportation methods
price(globalization)
adjusted to foreign wages
promotion(globalization)
deals to encourage new consumers
