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Strategies to increase Business Revenues

AS, A Level, IB
AQA, Edexcel, OCR, IB, Eduqas, WJEC

This revision video considers some of the ways businesses can increase their total revenues.

Strategies to increase Business 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:

  1. Increasing the quantity (amount, volume) sold over time
  2. 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

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