27 Outline one problem a business might face as a result of expansion.

[Sir Afzal Shad]

27 Outline one problem a business might face as a result of expansion. [3]
Hint: Communication problems > It becomes harder to pass messages accurately through a larger organisation.
Hint: Financial problems > The business might run out of cash (overtrading) if it grows too fast.

[Shaliza khawaja]

A business could face loss of control as it expands.For example, when a company like McDonald’s opens more branches, it adds extra layers of management.This can slow down decision making and force managers to delegate more tasks, which increases the risk of mistakes or poor communication,As a result, the business may face inconsistent quality across outlets, harming its brand reputation and customer satisfaction.

Examiner Comments:
- Loss of control (additional layers) >> make managers to delegate more >> require additional trainings for subordinates / more chances of errors by them >> lack of consistency in quality >> ....
- Add proper structure & example of business to make your analysis workable.

[shamaim shakeel]

(KN)
One problem a business might face after expansion is poor communication and control because the business becomes larger.

(APP)
For example, if a local bakery opens many new branches, it may be hard for the owner to manage all of them properly.

(AN)
This can lead to confusion among workers and mistakes in orders.
It may also slow down decision making and reduce efficiency.
As a result, the business could face higher costs and lower customer satisfaction.

[Aarib Saad]

(KN)Communication problems.
(APP)For instance, a growing restaurant franchise might have difficulty in accurately informing all of it's cooks about new recopies and methods for cooking certain dishes.
(AN)This will lead to inconsistent quality, so consumer expectations will not be met, leading to worsened brand image, leading to poor word-of-mouth, decreasing consumer base.

[Muaz Aamir]

KN Expansion means when a business grows by increasing its size, output, or number of branches.

AP For example, a small bakery opening multiple new shops across the city.

AN A problem with expansion is that it can cause cash flow issues because the business spends a lot before earning returns, which creates short term financial pressure and can lead to trouble paying bills or even falling into debt if growth isn’t managed carefully.

[Aayan Zaidi]

KN: When a business expands, it can face new challenges in managing its operations.
APP: E.g a cafe opening more branches might struggle to keep quality and service the same.
AN: So, expansion can lead to management problems, higher costs, or loss of control.