5 organisation_growing_a_business

5 organisation_growing_a_business - tutor2u GCSE Business...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
tutor2u GCSE Business Studies Growing a business Introduction The growth of a business is when it expands in size. The size of a business can be measured by the following means: f Sales turnover (or sales revenue) f Number of employees f Share capital (the number of shares times the price of each share) f Market share – the sales of the business of a particular product as a proportion of all sales of that type of product. A 5% market share would mean that 1 in 20 of all products sold are sold by that business. f Number of outlets (e.g. shops) They may mean to grow in size or sometimes it just happens without the business making a conscientious effort to do so. Businesses either grow organically or by acquisition and mergers. f Organic growth means the business grows by expanding its sales or their operations and is financed through its own profits. f Acquisitions and mergers are when the business joins or buys other businesses, not necessary of the same type. Businesses may wish to expand for the following reasons: f Benefit from economies of scale – lower unit costs due to an increase in size f A larger market share (selling more products than before) means they can charge higher prices and gain more profit f As means of survival if they wish to compete with other growing businesses Some businesses start selling or acquiring businesses that are not in the same market as the markets
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

5 organisation_growing_a_business - tutor2u GCSE Business...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online