The Implications of Expansion

Aspects of a Business impacted by Expansion

• Products: Expansion allows more product offerings.
  • Short term: Bigger range of products.
  • Long term: More money for market research and development, leading to even more products.

• Management and Organisation Structure: Expansion requires structural changes.
  • Short term: New structure to eliminate duplication (e.g., two CEOs).
  • Long term: Delegation needed, may switch to geographic or product structure.

• Finance: Expansion impacts financial needs.
  • Short term: Need to raise funds through shares or borrowing.
  • Long term: Better credit rating, easier to get loans, and attract investors.

• Supplies: Larger businesses gain supply chain advantages.

  • Short term: Discounts and better service from bulk buying.
  • Long term: Continued discounts and service benefits.

• Profits: Expansion affects profitability.

  • Short term: Initial costs may decrease profits.
  • Long term: Economies of scale should increase profits.

• Employees: Expansion changes employee dynamics.

  • Short term: Job insecurity and lower morale due to redundancies.
  • Long term: Better pay and job security in successful expansions.

• Customers: Expansion affects customer experience.

  • Short term: More products at lower prices.
  • Long term: Continued product variety, possibly less personal service.

• Share Price: Expansion influences share value.

  • Short term: Share prices rise as investors seek shares in expanding companies.
  • Long term: Increased profits lead to higher share prices.