Leaving Cert Business Business Expansion: Outline two reasons for business

Question

Outline two reasons for business expansion.

1. To increase profits: The entrepreneur wants to increase profits. As the firm grows, it can make more efficient use of resources. It can also reach a wider market.

2. Survive economic shocks: Bigger businesses are better able to 'ride the storm' and survive economic shocks compared to smaller firms. This ensures stability.

3. Eliminate competition: A business might seek to overcome its competitors in order to get rid of the opposition and gain market share.

4. Economies of scale: Producing goods on a larger scale lowers the cost of production, allowing the business to either make a larger profit or sell the products at lower prices.

5. Diversification: A business might develop new products or services, reducing the risk and not relying on one product/market.

Outline two reasons for business expansion - Leaving Cert Business - Question A - 2014

Worked Solution & Example Answer:Outline two reasons for business expansion - Leaving Cert Business - Question A - 2014

Outline two reasons for business expansion.

Join the Leaving Cert students using SimpleStudy...