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Examine the pressures on all firms to become larger and the opportunities and threats they face in doing so.
As the anonymous philosopher once observed, “You’re either growing or your dying” suggest that all businesses, large or small at some point are faced with the pressure of expanding, this can be looked at as either an opportunity to maximise profits or be in a position where your business if forced to expand. The opportunities are that the business will gain local preference over other businesses and on the other end small businesses that choose to stay a small, are being taken over by the larger businesses. This means that they are at risk of losing their customers and profits because of the larger businesses cheap prices and so they are forced to expand rather then doing it voluntarily. In this essay, I am going to look at the various reasons of expanding a business and what pressure is put on the business thinking of expanding. I will then follow with the opportunities ant threats that businesses face once they are expanded and how this decision will support them in the future.
The main reason that businesses go large and grow is because of the pressures that they are faced with within and externally of the business. Owners of small businesses are faced with turmoil when larger businesses are taking over their profits and customers. This is because they are small, buying products from suppliers are bought at the normal rate which means that if they do not get products at a discounted rate they are unable to lower their prices and provide customers with cheap, yet have the same quality whereas bigger companies buy products cheaper at discounted rates because of the amount they purchase. An example of this would be Tesco; they a ...