Growth of firms
- Created by: Bananabear
- Created on: 08-06-15 15:39
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- Growth of firms
- Main objective of firms
- maximise profit
- The larger the firm the more control it has over it's market
- can make more profit
- How they grow
- External
- Merger or take over
- Firms join together
- Merger or take over
- Internal
- Increasing sales
- Buy new equipment, outlets or factories
- Buy in more labour
- Market its products in a more effective way
- Increasing sales
- External
- Firms need to grow
- Produce more to sell more
- Provide what is wanted
- Gain more profit
- Provide what is wanted
- In order to produce more
- land
- Labour
- Capital
- Could be limitations
- Produce more to sell more
- Benefits of growth
- no longer competition
- new ideas
- gain from economies of scale
- increased market share
- Increased profit
- Costs of growth
- costs a lot to merge/take over
- business may have different objectives and targets
- diseconomies of scale
- Higher prices to pay
- Two managers may not agree
- less choice for customers
- Job loss/insecurity
- Main objective of firms
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