Growth

• why do businesses want to grow?

  • to increase market share and profitability
  • opportunities for product diversitifcation
  • larger firms often have easier access to finance
  • reduce costs through economies of scale
• types of internal economies of scale

  • financial
  • managerial
  • marketing
  • purchasing
  • technical
  • risk bearing
• types of external economies of scale

  • geographical cluster
  • transport links
  • skilled labour
  • favourable legislation
• what are the three problems with business growth?

  • diseconomies of scale
  • internal communication
  • overtrading