Expanding A Business
Aperçu
A bakery that makes 200 loaves a day and a bakery that makes 20,000 do not simply differ in size. The larger one buys flour by the tonne at a price the smaller one will never be offered, runs an oven the smaller one could never fill, and spreads the cost of its accountant across a hundred times as many loaves. That is why growth is worth chasing. It is also why the larger bakery has three layers of management, a communication problem and staff who have never met the owner.
In this lesson you will learn the ways a business can get bigger, from opening new outlets and selling online to franchising, outsourcing, mergers and takeovers, and the arguments for and against each. You will learn what economies of scale actually are, with the two the specification names in particular, and what diseconomies of scale are and why they set in. And you will learn to calculate average unit cost, which is the number that turns the whole argument from an opinion into arithmetic.
Objectifs
- Methods of expansion.
- Benefits and drawbacks of expansion.
- Economies of scale.
- Diseconomies of scale.
Carte mentale
Ce theme est schematise pour montrer comment les idees se relient.
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Note de cours
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Évaluation de la leçon
Félicitations, vous avez terminé la leçon sur Expanding A Business. Maintenant que vous avez exploré le concepts et idées clés, il est temps de mettre vos connaissances à lépreuve. Cette section propose une variété de pratiques des questions conçues pour renforcer votre compréhension et vous aider à évaluer votre compréhension de la matière.
Vous rencontrerez un mélange de types de questions, y compris des questions à choix multiple, des questions à réponse courte et des questions de rédaction. Chaque question est soigneusement conçue pour évaluer différents aspects de vos connaissances et de vos compétences en pensée critique.
Utilisez cette section d'évaluation comme une occasion de renforcer votre compréhension du sujet et d'identifier les domaines où vous pourriez avoir besoin d'étudier davantage. Ne soyez pas découragé par les défis que vous rencontrez ; considérez-les plutôt comme des opportunités de croissance et d'amélioration.
- Which one of the following is an example of external growth? A. Buying a competitor B. Launching an online shop C. Opening a second factory D. Training staff to work faster Answer: A
- A factory has fixed costs of 90,000 and variable costs of 6 per unit. It produces 10,000 units. What is its average unit cost? A. 6 B. 9 C. 15 D. 150,000 Answer: C
- Which one of the following is a cause of diseconomies of scale? A. Buying raw materials in larger quantities B. Poor communication between departments C. Spreading fixed costs over more units D. Using larger and more efficient machinery Answer: B
- Which one of the following best describes purchasing economies of scale? A. Borrowing money at a lower rate of interest because the business is large B. Buying in large quantities and being charged a lower price per unit C. Employing specialist managers for each department D. Using machinery that only pays for itself at high output Answer: B
- Which one of the following is a drawback to a franchisor of expanding by franchising? A. Growth is funded by the franchisee rather than the franchisor B. The franchisor receives a share of the franchisee's profits C. The franchisor has less direct control over the quality of service D. The brand becomes known in more towns Answer: C
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