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Advantages of Different size business - Coggle Diagram
Advantages of Different size business
Small Businesses
Advantages
Can be managed and controlled by the owner(s) - little risk of losing control
Often able to adapt quickly to meet changing customer needs - Especially is the owner(s) directly deal with the customers
Offers personal services to the customers to build customer loyalty
Easy to know each worker since there aren't many of them
Well motivated employees because they are family owned and this means that the communication could be informal
Disadvantages
The owners/s has/have to carry a large burden of responsibility if unable to afford to employ specialist managers
May be diversified meaning there could be a bigger risk of negative impact for external change
May have limited access to source finance
A few opportunities for economies of scale
Large Businesses
Advantages
They can benefit from cost reductions with large scale production
have access to several different sources of finance
Can afford to employe specialist professional managers
Are more likely to be able to afford research and development into new products and processes
They could be able to set low prices that other firms have to follow
May diversify the markets so products have a lower risk
Disadvantages
They could have potential cost increases associated with large scale products
They could suffer from slow decision making and poor communication depending on the structure of the organisation
May be difficult to manage (internationally)
They could suffer from divorce between ownership and control that can lead to conflicting objectives