Business size and growth
Once a firm is established in a market it is common for its owners to grow the business. How might a company grow?
Internal growth is when a firm expands without involving other businesses. Organic growth means that the firm expands by selling more of its existing products. This is often a slow process and could be done by selling to a wider market.
External growth is a faster method of growth. This can be by acquisition or takeover of other businesses or by merging with a competitor. A takeover is when one company takes control of another. A merger usually means that two companies have agreed to join together and create a new company.
Here’s why businesses need to grow:
In some industries firms may not survive if they remain small. Staying small might mean that costs are too high. They may not be able to compete with larger rivals. Also, small firms may be taken over by a larger firm.
Gain economies of scale
As firms grow in size they will also enjoy economies of scale. This means that unit costs will fall and profits will improve.
Increase future profits
By growing and selling larger volumes, a firm will hope to raise profits in the future.
Increase market share
Larger firms may be able to dominate the market. For example, they might be able to raise prices or control part of the market. Some staff may enjoy the status and power associated with a high market share.
Risk can be reduced through diversification. Branching out into new markets and new products means that if one product fails, success in others can keep the company going.
Ex. 1 Match these Polish expressions to their English equivalents:
Ex.2 Combine the expressions from the two columns to form collocations as in the text:
1. to branch a new company
2. to compete in size
3. to create market share
4. to dominate out into new markets
5. to enjoy profits
6. to grow the market
7. to increase the status and power
8. to merge to a wider market
9. to raise with a competitor
10. to sell with large rivals
Ex.3 Translate the expressions above into Polish.
I know English idioms!
In this lesson we could read about how businesses grow. This fact is inseparably connected with the idea of making progress, moving forward which in English can be expressed with the idiom:
• to gain ground (= odnosić coraz większy sukces)
➢ Our company is gaining ground trying to become the best brand in the industry.
The key word of this lesson is “growth” and the corresponding verb “to grow”. It’s one of the most important verbs when we describe trends and changes and it’s necessary to remember that “to grow” is the ONLY correct form, e.g.
➢ Our profits are growing month by month.
However, students of English have a tendency to add to this verb the particle “up” and say “to grow up”. This verb exists but it has a completely different meaning: to become older (dorastać)! e.g.
➢ He grew up in a poor family but later become a millionaire.
Remember than the difference and don’t say “grow up” about market trends!
One of the sentences from this lesson’s text reads: “Internal growth is when a firm expands without involving other businesses.” The sentence uses an interesting structure, composed of the preposition “without” and -ing form: “without doing (here: involving)”. As such it can be generally translated as: “nie robiąc czegoś” or “bez robienia czegos”.
Ex. Say these sentences in English using the structure with the structure “without doing”:
1. Odpowiedział, nie czekając na pytanie.
2. Nie znając całej sprawy (case), próbowali mi pomóc.
3. Zrobiła to bez wahania (hesitate).
size – rozmiar, wielkość
growth – wzrost, rozwój
to be established – zostać założonym
market – rynek
common – powszechny
owner – właściciel
to grow – rozwijać
internal – wewnętrzny
to expand – rozrastać się
without involving – bez angażowania
exisiting – istniejący
wider – szerszy
external – zewnętrzny
faster – szybszy
acquisition / takeover – przejęcie
to merge with – połączyć się z
competitor – konkurent
to join together – połączyć się
survival – przetrwanie
industry – branża
to remain – pozosta(wa)ć
to mean – oznaczać
to compete – konkurować
rival – rywal, konkurent
economy of scale – ekonomia skali
unit cost – koszt jednostkowy
to improve – poprawiać się
to increase – zwiększać
profits – zyski
to raise – zwiększać
market share -udział w rynku
to dominate – dominować
power – władza
to reduce – zmniejszać
risk – ryzyko
diversification – dywersyfikacja
to branch out into – przerzucić się na, przebranżowić
to fail – odnieść porażkę
1. wzrost – growth
2. rynek – market
3. przejęcie – acquisition/takeover
4. konkurent – competitor
5. jednostka – unit
6. zysk – profit
7. władza – power
8. ryzyko – risk
Ex.2 & 3
1. to branch out into new markets – tu: wejść na nowe rynki
2. to compete with large rivals – konkurować z dużymi rywalami
3. to create a new company – stworzyć nową firmę
4. to dominate the market – (z)dominować rynek
5. to enjoy the status and power – cieszyć się statusem i władzą
6. to grow in size – rosnąć pod względem fizycznych rozmiarów
7. to increase market share – zwiększyć udział w rynku
8. to merge with a competitor – połaczyć się z konkurentem
9. to raise profits – zwiększać zyski
10. to sell to a wider market – sprzedwać na szerszym rynku
Ex. Grammar corner
1. He answered without waiting for the question.
2. Without knowing the whole case, they tried to help me.
3. She did it without hesitating.