Growth and the impact of globalization

1. GROWTH AND THE IMPACT OF
GLOBALIZATION.

2. GROWTH AND EVOLUTION
 Economies of scale
 How does a business benefit when it grows?
 Average costs (unit costs)
 Suppliers
 Bulk, transport

3.  Economies of scale
 Managers- specialize
 Banks- lower interest rates

4.  Diseconomies of scale
 Costs begin to rise.
 Communication breakdowns.
 Decision making slows down.
 Inefficiency

5.  Diseconomies of scale
 Motivation falls- productivity drops
 Costs rise

6. IS IT BETTER TO EXPAND YOUR BUSINESS OR
TO STAY SMALL?
 Friendly atmosphere
 Lower levels of debt
 Different skills are needed to lead a large
organisation.

7. ON THE OTHER HAND…
 Export
 Less dependent on one product or one market.
 Career opportunities
 Less worry about making people redundant.
 Owners increase their wealth.

8. INTERNAL (ORGANIC GROWTH)
 Increasing sales by
 Advertising, cutting prices, recruiting more agents.
 Developing better production techniques.

9. GROWTH THROUGH EXTERNAL SOLUTIONS
 Joint ventures
 Strategic alliances
 Mergers and acquisitions
 Franchises