Introduction to Business: Business size and growth

Business size and growth is a foundational topic in OCR A-Level Business, exploring how we measure the scale of a business and the strategies it can use to expand. Understanding business size is crucial because it influences a firm's market power, access to finance, and ability to achieve economies of scale. This topic also examines the motives for growth, such as increased profits, market share, and risk reduction through diversification. You'll learn to differentiate between internal (organic) growth and external growth via mergers and takeovers, and evaluate the advantages and disadvantages of each approach.

This topic directly links to other areas of the syllabus, including business objectives, marketing, finance, and human resources. For example, a growing business may need to raise finance (linking to sources of finance) and manage a larger workforce (linking to motivation and organisational structure). You'll also encounter key concepts like economies of scale, diseconomies of scale, and the distinction between integration types (horizontal, vertical, and conglomerate). Mastering this topic will help you analyse real-world business strategies, such as why a small café might choose to expand organically by opening new branches, while a large supermarket chain might acquire a rival to increase market share.

In exams, you'll be expected to apply these concepts to case studies, evaluating the suitability of different growth strategies for a given business. You should be able to calculate and interpret measures of business size (e.g., number of employees, revenue, market capitalisation) and discuss the potential benefits and drawbacks of growth. This topic also prepares you for synoptic questions that require you to draw on knowledge from across the specification, such as the impact of growth on stakeholders or the ethical implications of takeovers.