IGCSE, A Level Business Student Forum

Q13 Analyse the benefits a business can have after expansion. [6]

Possible Structure:
[KN]
[AN]
[AN+]

[KN]
[AN]
[AN+]

[KN] Increased Market Share.
[AN] Business expansion allows a company to reach a wider audience, increasing its market share.
[AN+] This, in turn, can lead to higher sales and revenue, making the business more competitive in the industry.

[KN] Economies of Scale.
[AN] As a business expands, it can often produce goods or provide services more efficiently, resulting in cost savings.
[AN+] These economies of scale can lead to higher profit margins and improved financial performance.

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Moderator Comment:
- 2nd KN and AN needs correction

[KN] Economies of Scale
[AN] as a business expands, it can take advantage of economies of scale.
[AN+] This means that the cost per unit of production decreases as output increases. Bulk purchasing, efficient use of resources, and streamlined operations can all lead to cost savings, improving the company's profitability.

[KN] Increased Market Share
[AN] Expansion often allows a business to capture a larger share of the market. This can lead to greater brand recognition, more customers, and increased competitiveness.
[AN+] A larger market share can also provide economies of scale, lowering the average cost of production and improving profitability.

KN: Market Diversification
AN: Expanding into different geographic regions or target markets reduces the reliance on a single market
AN+: risk associated with local economic downturns or changing consumer preferences.
KN: Increased Profitability
AN: Expanding can lead to higher profitability, particularly if it's done strategically.
AN+: Entering markets with less competition or greater demand can yield higher profits

[KN]Increased Revenue and Profits
[AN]as the company serves a larger customer base or enters new markets. This can ultimately result in higher profits.
[AN+]They can use this money to further invest and expand their business

[KN]Economies of Scale
[AN] they would be able to achieve a low cost of production level which increases efficiency and maximizes resources
[AN+] this results in less wastage

[KN] Increased revenue
[AN] When a business expands, it often taps into new customer bases, markets, or product lines. This expansion leads to increased sales and revenue.
[AN+] This growth in revenue can result in higher profits and provide resources for further investment or expansion.

[KN] Economies of scale
[AN] As a business grows and expands, it can achieve economies of scale. This means that the cost per unit of production decreases as the business produces more.
[AN+] For instance, a manufacturing company that expands its production capacity may be able to negotiate better deals with suppliers, reduce per-unit production costs, and operate its facilities more efficiently, all of which can improve profitability.

[KN]Increased revenue and profitability
[AN]Expansion often leads to an increase in sales and revenue. By tapping into new markets or serving a larger customer base, a business can grow its top-line revenue.
[AN+]May also lead to economies of scale(reduced product costs per unit)

[KN]Competitive advantage
[AN]Expanding can provide a competitive advantage by allowing the business to offer a broader range of products or services. This can attract a more diverse customer base.
[AN+]Thus this may increase market share

[KN] Increased revenue
[AN] When a business expands, it often taps into new customer bases, markets, or product lines. This expansion leads to increased sales and revenue.
[AN+] This growth in revenue can result in higher profits and provide resources for further investment or expansion.

[KN] Economies of scale
[AN] As a business grows and expands, it can achieve economies of scale. This means that the cost per unit of production decreases as the business produces more.
[AN+] For instance, a manufacturing company that expands its production capacity may be able to negotiate better deals with suppliers, reduce per-unit production costs, and operate its facilities more efficiently, all of which can improve profitability.

[KN] spread of risk of failure[AN] When a business expands, it opens up more buildings and spreads its territorial presence [AN+] hence if one if the firms fails in a region it will still have the other product and or building to rely on

[KN] Economies of scale[AN] the more a business expands to a limit it can benefit from lower long run average costAN+] this can be seen as if a firm does bulk purchasing it can get discounts on it lowering cost of production and hence prices can also be lowered increasing sales

(kn)more profit
(an)if the demand for price is inelastic firms can transfer tax's on the product price
(an+)leading to more revenue
(kn)increase status
(an) firms mostly expand due to high reputation which means that whatever product they launch is likely to be successful
(an+) hence firms have a sense of security about profit

[KN] Increased in market share
[AN] while expanding they start producing more goods
[AN+] thus this would lead the frim to reach out new and more customers

[KN] AN increase in profit
[AN] with a rise in size of the firms the production will rise and thus resulting in high profit per unit
[AN+] this would also help them expand even further

[kn] increased revenue
[an] as the business now has higher profits and sales
[an+] allowing it to grow even further and become successful
[kn] attracts the eyes of the customers
[an] expanding a business makes it more visible and therefore leads to increase in customer visits
[an+] causing increase in sales and enhances brand image

[KN] Higher market share.
[AN] From expanding a wider customer base will catered which will help increase profit levels and hence brand image.
[AN+] Thus this will lead to increase in incentive for the business to further increase investment.

[KN] Coming into competition.
[AN] The business may become a market leader too if it is able to gather a wider and loyal customer base.
[AN+] Thus this will lead to an increase in brand identity and

[Kn]Increased Sales
[An]When a business expand it has a ability to reach more customers and improve customer services they will be more loyal
[An+] which will lead to increased profits and customer satisfaction

[Kn] Innovation and ideas
[An] as business expands, they hire new employees who bring valuable skills and perspectives to your company.
These employees can help you develop new strategies and implement innovative solutions that can take your business to the next level.

[kn] rising popularity and reputation
[an] means having more power over the market
[an+] can encourage the launch of innovative products

[kn] a rise in the amount of customers
[an] as businesses expand into more markets with innovative products, it attracts a large amount of diverse customer base
[an+] increased revenue and brand image for the business