Enterprise, Business Growth And Size: Why Some Businesses Grow And Others Remain Small (Copy)
Cheat Sheet: 3.3 Why Some Businesses Grow and Others Remain Small
| Aspect | Explanation | Example | Quick Note |
|---|---|---|---|
| Why Owners Want Growth | Increase profits, market share, reduce costs (economies of scale), survival, status/prestige | Amazon expanding globally | Growth often seen as success |
| Internal Growth | Expansion from within the business (more branches, more products, new markets) | Starbucks opening more outlets | Slow but steady |
| External Growth | Joining/merging with or taking over another business | Facebook buying Instagram | Faster growth, but riskier |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course
Problems of Growth
| Problem | Explanation | Example | Solution |
|---|---|---|---|
| Communication issues | Larger firms → harder to pass info | Multinational with many layers | Use tech, flatter structures |
| Management difficulties | More complex organisation | Rapid merger in telecom industry | Skilled managers, training |
| Financial strain | Expansion needs finance | Small firm opening 10 outlets at once | Loans, retained profit |
| Loss of control | Owners can’t oversee everything | Family business expanding abroad | Delegation, professional managers |
Why Some Businesses Remain Small
| Reason | Explanation | Example |
|---|---|---|
| Market niche | Specialist products for small groups | Luxury handmade jewellery |
| Owner preference | Lifestyle choice, easier control | Local bakery staying family-run |
| Lack of finance | Limited funds for expansion | Small shop unable to raise capital |
| Competition | Strong big firms dominate | Local retailer vs. Walmart |
| Customer loyalty | Personalised service, local trust | Barber shop serving same clients |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course
Quick Revision Bullets
- Growth = profit ↑, market share ↑, survival
- Methods = internal (slow, safe) vs. external (fast, risky)
- Problems = communication, control, finance
- Some stay small → niche markets, owner choice, resource limits
- Not all firms aim to expand
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course