Question

While business expansion typically represents growth and profitability it is not always the right decision and timing is incredibly important. A company can easily drop the price of their product to move inventory and bring in cash however if the income does not cover the expenses then the decision was not a good one. Expansion is a similar concept and can be done quickly and ill-informed causing a great deal of problems for the business. A company looking to gain market share may open another location across town, for example, however if the staff is not present, trained and able to provide the same quality service as the first location then not only is it possible for this second location to fail but the company’s reputation may become damaged by the poor experience of the consumer. A business needs to have adequate resources to support any planned expansion with a thorough analysis to identify the impact of an expansion and plan accordingly. This analysis needs to be done well ahead of the proposed expansion with ongoing reporting to show the success of the expansion. It will be important for the business to periodically examine the financial state of the business to determine if utilizing the resources on the expansion is resulting in the most profitable outcome or if the resources would be better used elsewhere.

Please respond to in over 100 words

Answer 1