growth and the impact of globalization
TRANSCRIPT
![Page 1: Growth and the impact of globalization](https://reader036.vdocuments.site/reader036/viewer/2022062522/587c8ec11a28abfa5e8b4cb7/html5/thumbnails/1.jpg)
GROWTH AND THE IMPACT OF GLOBALIZATION.
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GROWTH AND EVOLUTION Economies of scale
How does a business benefit when it grows?
Average costs (unit costs)
Suppliers Bulk, transport
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Economies of scale
Managers- specialize
Banks- lower interest rates
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Diseconomies of scale
Costs begin to rise.
Communication breakdowns.
Decision making slows down.
Inefficiency
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Diseconomies of scale
Motivation falls- productivity drops
Costs rise
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IS IT BETTER TO EXPAND YOUR BUSINESS OR TO STAY SMALL?
Friendly atmosphere
Lower levels of debt
Different skills are needed to lead a large organisation.
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ON THE OTHER HAND… Export
Less dependent on one product or one market.
Career opportunities
Less worry about making people redundant.
Owners increase their wealth.
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INTERNAL (ORGANIC GROWTH) Increasing sales by
Advertising, cutting prices, recruiting more agents.
Developing better production techniques.
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GROWTH THROUGH EXTERNAL SOLUTIONS Joint ventures
Strategic alliances
Mergers and acquisitions
Franchises