Topic Videos

Strategies to increase Business Revenues

Level:
AS, A-Level, IB
Board:
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.

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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