Page 37 - Cambridge IGCSE Business Studies
P. 37
3: Enterprise, business growth and size
ACTIVITY 3.2
The table below shows data for three companies which are all manufacturers of home entertainment appliances such as
televisions and DVD players.
Company data Company A Company B Company C
Revenue $280,000 $380,000 $410,000
Capital employed $200,000 $500,000 $350,000
Number of employees 60 35 50
1 Each company claims to be the largest in the industry. Why can they do this?
2 Why might the number of employees NOT be a good measure of size in this industry?
3 Which of the three companies do you think is the largest? Give reasons for your answer.
TEST YOURSELF
1 Identify three methods of measuring the size of a business.
2 Explain one problem of measuring business size.
Why some businesses grow and others
remain small
35
Growth is a long-term objective of most, but not all businesses. Some businesses
prefer to remain small, while others wish to expand. For example, a chocolatier
making specialist, hand-made chocolates may want to stay small, while a chocolate
manufacturer who wants to produce chocolates for the mass market will want to grow.
Figure 3.5 Some business prefer to remain small, while
others will want to grow
Why owners may want to expand their business
Expanding a business can bring many benefits, including increased profits and a
larger share of the market.
