Strategies to increase Business Revenues
- AS, A-Level, IB
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 16 Sept 2020
This revision video considers some of the ways businesses can increase their total revenues.
Factors influencing business revenues
In some industries & markets, revenues are highly cyclical - i.e. exposed to changes in the macroeconomic cycle (link to products having a high, positive income elasticity of demand).
For some goods and services, demand is “counter-cyclical” i.e. may rise during a recession / slowdown.
Other businesses might be exposed to external economic shocks e.g. those sensitive to changes in global trade / public health crises.
There are two main approaches to increasing total revenue:
- Increasing the quantity (amount, volume) sold over time
- Achieve a higher selling price per unit (average revenue)
Increasing the volume of sales:
- Enter new markets with existing products incl. targeting overseas markets
- Broaden the product range to widen the revenue base
- Extend the product life cycle for existing goods and services
- Engage in price discrimination strategies
Achieve a higher selling price per unit:
- Premium pricing for higher quality goods and services
- Targeting sales in countries where customers have a higher per capita incomes
- Create artificial scarcity of supply to drive average selling price upwards
- Use product bundling to increase the average order value