Measuring business size

Name business of different sizes:

Small

Medium

Large

https://www.youtube.com/watch?v=Qs5eSFD8CTc

https://www.youtube.com/watch?v=lb7wkIcRtyg

https://www.youtube.com/watch?v=o2RfyGcRVcI

Measuring business size

Capital employed

Value of output

Number of employees

Market share

The end

Name as many ways as you can of measuring a business

What are the limitations to 'X' method of measuring a

business size?

List and explain

Student 1... method of measuring business size Student 2... limitation of that method Student 3 etc

Measuring the size of a business

What are the four methods:1.2.3.4.

Which business is biggest?A B C

Revenue $ 280,000 380,000 410,000Capital employed

$ 200,000 500,000 350,000Number of employees 60 35 50

Which business is biggest?A B C

Revenue $ 280,000 380,000 410,000Capital employed

$ 200,000 500,000 350,000Number of employees 60 35 50

They are all the biggest!!!

What are the limitations to measuring the size of a business?

Using different meaures leads to....... so its is a good idea to use more than one...... because....

So in our example... B could be the biggest overall, despite having fewest employees.

It all depends... SO BE CAREFUL

Why some businesses grow and others remain small

Growth is a objective of most, but not all businesses.

For example a chocolatier making specialist, hand made chocolates may want to remain small, whilst a chocolate manufacturer might want to produce chocolate for the mass market will want to grow.

https://www.youtube.com/watch?v=MrNtVV9TAJAhttps://www.youtube.com/watch?v=j1YkNWM4nEk

Staying smallStaying small:

1. Can maintain quality

2. Can adjust to changing customer needs

3. Maybe the market is too small to grow.

Reasons to grow in size

Increase in profitsIncrease in market shareEconomies of scaleGreater power to control the marketProtection from risk of takeover

Growth can be internal or externalInternal growth:Increasing the number of goods it can produceDeveloping new productsFinding new markets for their products

External growth:Horizontal integrationForward vertical integrationBackward vertical integrationConglomerate integration

Air India case study p37

Air India is trying to achieve internal growth in these two ways...

Air India could ….. in order to achieve its growth objective, because...

I think Air India will achieve its plans for growth because...

Activity 3.3 p.381. Copy the table2. The main advantage to a fruit canning

factory of backwards vertical integration is..., I believe this to be so because....

3. The main advantage of conglomerate integration is...

4. An overseas holiday business integrating with a travel agency brings the following benefits...

5. Large and small car manufacturers integration brings the following advantages..

https://www.youtube.com/watch?v=dGO1oEwxYWA

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