3.2.4 Reasons For Staying Small

Question 1

not all businesses want to grow into multi-national corporations. some choose to remain small. what are the reasons small firms exist ?

Answer 1

• offer a more personalised service
• they are unable to access finance to grow
• they operate in a niche market which has a small market size but can be profitable
• owners goal may be to profit satisfice

Question 2

how can Kay’s distinctive capabilities be applied to a small business

Answer 2

• a business that remains small rather than operating mass market can survive by strengthening Kay’s distinctive capabilities.
• highlight how the product is differentiated
• responding to customer needs and excellent customer service is more achievable