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Business growth - Coggle Diagram
Business growth
Problems with growth
Diseconomies of scale
Poor internal communication
poor employee motivation
poor managerial communication
Overtrading
Why firms grow
Increase profitability
Achieve economies of scale
More market power
More market share and brand recognition
Why firms stay small
product differentiation and usp
Flexibility
Customer service
E-commerce
Organic growth
Advantages
leader influence stays strong
reduction of financial risk
secure career paths
Disadvantages
Can be very slow
too predictable (#boring)
Methods
new stores
Developing portfoio
Inorganic growth
Methods
Forward vertical integration
Backward vertical integration
Horizontal integration
Conglomerate Integration
Advantages
Quicker then organic
Challenging for leaders and staff
Spreads risk
Market power + share
Disadvantages
Unpredictable
High cost
Risky
corporate culture clash