IGCSE, A Level Business Student Forum

Q5 Analyse the situations in which growth can be the right business objective. [6]

---
Possible Structure
[KN]
[AN]
[AN+]

[KN]
[AN]
[AN+]

[KN] when the business is just starting off
[AN] they would need to increase their advertisement to increase awareness
[AN+] this would result in more exposure and increase its sales

[KN] when the business has introduced a new product
[AN] this would result in more exposure needed for the product
[AN+] this would help the product launch and make an instant impact and recoevr its development costs

[KN] Startup businesses
[AN] For startups, the main objective is often growth.
[AN+] They need to acquire customers, increase their market share, to establish a presence in the industry.

[KN] Competitive Advantage
[AN] Aiming for growth can help companies build a competitive advantage.
[AN+] Expanding product lines, entering new markets, or innovating can create a stronger market position.

[KN] For Startups
[AN] Startups only want to survive, and their main aim is growth as they just came into being.
[AN+] They need to gain customers and establish their name in the market.

[KN] Economies of Scale.
[AN] It might make sense to give growth top priority as a business goal if it can result in significant economies of scale.
[AN+] Larger businesses can frequently produce goods or services more cheaply, increasing their profitability.

[kn] when high amounts retained profits [an] the more the profits the more the chances of successful expansion [an+] this will help them gain more customers and increase market share
[kn] to gain economies of scale [an] when a business expands they advantage from lower long run average cost [an+] this will reduce their cost of production which can enable them to lower prices and increase sales

[kn] growth can be the right option of the business when the business want to achieve economies of scale.
[AN]so they try to increase production volume which reduces the cost per unit thus allow company tomtake advantage of these cost effencies
[AN+]thus the business can have the abilit of more competitve prcing which can increase market share

[KN]to get competitive advantage
[an]AS GROWTH CAN help business establish it self a market leader this ca be important in industries where brand recognition are are important
[AN+]business will able to set industry standards dictate pricing and share the market in your favour

[KN] Economies of Scale
[AN] Growth can lead to cost efficiencies because as you produce more you might be able to reduce the cost per unit which can increase your profit margins.
[AN+] larger businesses can frequently produce goods or services more cheaply, increasing their profitability.

[KN] talent and innovation
[AN] Attracting and retaining top talent often becomes easier when a company is growing.
[AN+] Growth can also provide opportunities for innovation and new projects, which can be exciting and motivating for employees.

[KN] business startups
[AN] they target growth so they can make their business aware
[AN+] this would lead to more exposure for the business

[KN] achieve economic growth
[AN] they target growth so they can achieve economies of scales e.g purchasing in bulk
[AN+] this would reduce per unit cost for the business

[KN] New Business
[AN] they will need to advertise to create awareness
[AN+] this would lead to increased sales

[KN] New and unique product
[AN] this will result in more sales as it will also have a USP
[AN+] this will help the business make maximum profit later when launching oit

[KN]When any of the business' products is in decline
[AN]Thus by producing new products it can target new markets
[AN]hence risk of the business can be spread

[KN]When COP is high
[AN]By growing, a business may be able to spread cost on large output which can reduce avg cost
[AN]leading to economies of scale

[KN] To achieve strategic goals.
[AN] Growth is the most appropriate objective when business may want to achieve goals like market dominance or becoming a market leader.
[AN+] Thus these can only be achieved if business has grown in a profitable manner attached with strings like customer loyalty, large market share and USP.

[KN] In order to expand globally.
[AN] Businesses who want to expand internationally may prioritize growth as it would help to access a larger pool of customers and increase its overall revenue and profitability.
[AN+] Thus this can reduce the reliance on on a single market and ensure further growth and differentiation for the business.

[KN] business has passed the introduction stage and people are informed about the products
[AN] Sales start to increase
[AN+] Total revenue rises

[KN] In times of economic growth when income levels are increasing along with the demand
[AN] more affordability and thus, sales will rise further
[AN+] increasing profits that will be reinvested further increasing the market share

[kn] when the business has passed the introduction stage and the product is well known
[an] thus sales are already increasing along with demand
[an+] so business has enough profit to stat investing in expansion
[kn] when income levels are increasing along with demand during economic growth
[an] therefore the sales will rise further due to more affordability of consumers
[an+] helping to achieve economies of scale which will then help reinvest more profit back into the business leading to expansion

(kn) after passing introduction stage and are informed about the products
(an) as business is receiving higher profit and demand is rising
(an+) they can reinvest that profit into the business through expansion
(kn)in times of economic growth
(an)a income levels are rising with demand business can reinvest it into the business
(an+) reinvesting the money into the business can multiply profit and keep a steady flow of income in the future