Q&A - How can the expansion of a firm be measured?
Recommend on Google+
What do we mean by expansion? In general, expansion is about making the business bigger. But, remember that we can measure the size of a business in different ways. For example:
• Sales revenues
• Profits
• Cash flows
• Capital invested
• Production output
• Number of employees
• Number of outlets or locations
• Value of the business (market capitalisation)
• Market share
In most cases an increase of one of the above measures of business size indicates that the firm is growing successfully - but not necessarily. For example, an increase in sales may lead to higher profits, but not necessarily. It depends on whether those extra sales are profitable (i.e. what additional costs have been incurred to achieve them).
Most business want to expand – to grow sales; to increase profits; to add new locations or extra outlets and to take on more staff. However, expansion is not always easy; nor is it the most appropriate option for some businesses.
A useful way to compare and contrast the options for business expansion is to think in terms of organic (internal) and inorganic (external) growth. The important thing to remember is that both internal and external growth is an option for most firms, and some businesses do both!
blog comments powered by Disqus
6 Essential M&A Cases: Tata Group buys Jaguar Land Rover [21 May 2012]
Takeovers and Mergers - Vue on the Growth Trail! [12 May 2012]
Takeovers and Mergers: Facebook & Instagram in News Clips [14 Apr 2012]
ResearchBuster: Acquisitions [8 Apr 2012]
Revision Presentation - Emerging Markets [7 Apr 2012]
The Main Motives Behind Takeovers and Mergers [26 Mar 2012]
“Strategy is Choice” - Takeovers are Just One Option [25 Mar 2012]
Starbucks chooses strategic alliance in bid to enter the Indian market [13 Mar 2012]
Takeover insights: Kraft & Cadbury - Justifying the Deal [22 Feb 2012]
Strategic choice: What should Facebook do with cash from the IPO? [30 Jan 2012]
Growth strategy - Starbucks eyes the franchise model [28 Jan 2012]
Tesco takes it ‘easy’, controlling costs in its US operations [11 Jan 2012]
Consolidation on the cards as IAG claims deal to acquire BMI [6 Nov 2011]
Greggs, Sausage Rolls and the Ansoff Matrix [20 Oct 2011]
Coming to a petrol station near you - Little Waitrose [12 Sep 2011]
Skype CEO on Aims, Growth, Risks and Motivation [4 Sep 2011]
Risk-free Curry? Searching for the Right Growth Strategy [29 Aug 2011]
Taking Italian to the Chinese - Pizza Express Expansion Strategy [24 Aug 2011]
ResearchBuster: Organic Growth [7 Jun 2011]
Organic growth strategy - the benefits if firms “believe in better” [24 May 2011]
Profit, not external growth, should be the sensible strategy? [22 May 2011]
Strategy explained - Insights into Amazon [13 May 2011]
Whitbread goes for organic growth [2 May 2011]
Horizontal integration in action - Virgin grabs Esporta [26 Apr 2011]
Tesco - The right strategy in the US? [23 Apr 2011]
Howard Schultz - A Changed Starbucks. A Changed C.E.O [13 Mar 2011]
External growth - Diageo on the acquisition trail [21 Feb 2011]
Takeovers: What happens next? [16 Feb 2011]
Exporting - No Thanks - We’re British [9 Feb 2011]
Emerging Markets Video - The perfect plenary [29 Jan 2011]
The Strategy Battle of 2011 - David’s kid brother versus Goliath [17 Jan 2011]
Small firms are embracing exporting - but still put off by “red tape” [29 Dec 2010]
Q&A - Why are acquisitions so popular as a method of business expansion? [21 Dec 2010]
Q&A - Explain what is meant by acquisitions or takeovers [21 Dec 2010]
Q&A - Should a business use franchising as part of its growth strategy? [21 Dec 2010]
Q&A - Explain “organic” or internal growth [21 Dec 2010]
Growing market share by stealth? Tesco and One Stop [17 Dec 2010]
Starbucks goes for vertical integration to fuel growth in China [18 Nov 2010]
Google, Profits and Diversification [16 Oct 2010]
Lesson Worksheet - Business Growth Basics [29 Sep 2010]
Strategy in Action: “Buying Growth is Not a Strategy” [20 Sep 2010]
Organic growth - Greggs CEO Outlines His Strategy [30 Aug 2010]
External growth strategy - takeovers back in fashion for large UK firms post recession [29 Aug 2010]
Starter Activity - AQA GCSE Unit 2, Growing as a Business [27 Jul 2010]
Growth strategy - takeovers return to building supplies [3 Jun 2010]
Strategy in Action - the Return of External Growth [28 May 2010]
Strategy Case Study - Asda Nets Netto [28 May 2010]
Howard Schultz on Starbuck’s Growth Prospects in China [19 May 2010]
A business that really takes acquisitions and disposals seriously [27 Mar 2010]
Cool looking map to highlight globalisation [1 Mar 2010]
Strategy in the UK Recession - What 69 UK CEOs Did About It [22 Feb 2010]
Branded coffee shops prove resilient to the UK recession [17 Feb 2010]
Recession turns the UK into a fast-food nation [16 Feb 2010]
Recession Buster - Dominos On the March [16 Feb 2010]
Strategic reaction to the UK recession - notes and observations [9 Feb 2010]
AQA BUSS4 Section B Practice Question - ITV & News Corp [7 Feb 2010]
Retrenchment and capacity cutting at Blacks Leisure - and then expansion again? [12 Jan 2010]
Reflections on the ‘Worst Deal in History’ – and the Best [6 Jan 2010]
Illustrating Growth Strategies - Walmart the Movie [23 Oct 2009]
The Grim Outlook for UK Unemployment in 2009 [1 Jan 2009]
BUSINESS TEACHER RESOURCE NEWSLETTER
Get first news of business teaching resources, ideas and other materials from tutor2u. Over 9,400 business teachers from the UK and around the world receive our regular teacher email newsletters. Sign up for free here!
