1.

5 Business Growth - 2

What are some of the reasons

organizations go through change?
• More manual work
• A few number of production
• A large number of production
employees
employees
• Huge investment on
• Less investment on
machines/equipment.
machines/equipment
• Production is mechanised.

Labour intensive Capital intensive

Capital intensive or Labour
intensive?
Capital Intensive refers to
those industries or companies
Labour intensive refers to a production
process where labour costs are the largest
that require large component. Labour intensive implies that
upfront capital investments in capital (machines/factories) are a small
machinery, plant & equipment percentage of the final cost.
in order to produce goods or
services in high volumes and
maintain higher levels of
profit margins and return on
investments
How do we measure size of a business?
• Sales revenue
• Profit
• No. of employees
• No. of branches
• Product range
• Capital employed
• Market share
• Production method
 Small v/s Large Organisations

Mr A Mr B
• Brand recognition
• Flexibility ( any business related matter) • Reputation
• Cost control • Value added services
• Personalized services • Economies of scale.
• Government aid/support • Greater choice for customers
• Local monopoly power • Reduced risk ( diversification)
Advantages
Disadvantages
 Students Teach Students(STS)
External Growth
• Mergers and acquisitions
• Joint ventures
• Strategic alliance
• Franchises