Expanding a business revision notes

A joint venture is a partnership between two or more businesses that share resources, risks, and profits to pursue a specific project or market.

Organic growth is the increase in a company’s size and revenue that comes from expanding existing operations, such as opening new stores, launching new products, or entering new markets, rather than from mergers or acquisitions.

Outsourcing is the practice of hiring an external organisation to perform a business activity that could otherwise be carried out internally.

Economies of scale are the cost advantages that a business obtains due to expansion, resulting in a lower cost per unit of output.

A purchasing economy is a cost advantage gained when a firm buys larger quantities of inputs or raw materials, often resulting in lower unit prices due to supplier discounts or bulk purchasing.

Diseconomies of scale occur when a business’s average costs rise as it expands, often because of increased complexity, coordination problems or reduced staff motivation.

The total cost of producing a set of goods divided by the number of units produced. It includes both fixed and variable costs.