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Economies of scale are a major source of competitive advantage for large firms.
What is a monopoly?
A government body
Two businesses joining together
When one retailer dominates a market
When does organic growth occur?
When a company hires more staff
When a company merges with a rival
When a company takes over a rival
A business will benefit from growth because it will gain more market power it will have more overheads it will have more competition( it will gain more market power, it will have more overheads, it will have more competition )
Hiring more staff is an example of external growth.
The risk of expansion means that some owners are reluctant to chance funds. They opt instead to stay big small( big, small ) and earn a relatively risk-free profit.
Owners can face a dilemma in deciding whether to expand. Expansion is risky. There's always the chance that any expansion plans can fail and result in losses profit( losses, profit ) rather than losses profit( losses, profit ).
Market power is not guaranteed with business growth.
Franchising External growth Internal (organic growth)( Franchising, External growth, Internal (organic growth) ) - where a business merges with or takes over another organisation. Combining two firms increases the scale of operation.
How can a business grow in size?
By delayering
By giving staff bonuses
By offering franchises