3.5 Firms.pptx

3.5

Firms

• AO1 Understand how firms may be classified. (AO1 理解公司如何分类。
• AO2 Be able to analyse how and why firms grow. (AO2 能够分析公司如何以及为何增长。)
• AO3 Be able to evaluate the advantages and disadvantages of growth. (AO3 能够评估增长的优点和缺点。)

Objectives

• Internal growth - 内部增长
• External growth - 外部增长
• Mergers - 合并
• Economies of scale - 规模经济
• Diseconomies of scale - 规模不经济

Key terms

• Economic Sector.
• Public or Private Sector.
• Size of the company

Classification of companies

The primary, secondary and tertiary sectors of an economy are interdependent. (经济的第一、第二和第三产业是相互依赖的。)

Economic sector (经济部门) Firms can be classified according to the economic sector in which they operate: (公司可以根据其运营的经济部门进行分类：) Primary sector — this sector of the economy contains firms that extract raw materials from the earth. (第一产业——该经济部门包含从地球提取原材料的公司。) Examples are fishing, mining and agricultural farming. (例如：捕鱼、采矿和农业种植。) Secondary sector — this sector contains firms that: (第二产业——该部门包含以下公司的：) manufacture goods, changing raw materials into finished products (制造商品，将原材料转变为成品) construct buildings, roads and bridges. (建造建筑、道路和桥梁。) Tertiary sector — this sector contains firms that provide services to the general public and other firms. (第三产业——该部门包含向公众和其他公司提供服务的公司。) Examples are: retail shops, doctors, dentists, schools, hairdressers, advertising agencies, lawyers, financial advisers, insurance companies and banks. (例如：零售商店、医生、牙医、学校、美容师、广告公司、律师、财务顾问、保险公司和银行。

Classification of firms: Economic sector (经济部门)

Classification of firms:Private and Public Sector

local government (地方政府)

national government (国家政府)

The type of organisations that would be in the public sector are: (属于公共部门的组织类型包括：)

Public sector (公共部门) Public sector organisations are owned and controlled by the government. (公共部门的组织由政府拥有和控制。) They aim to provide a service to the public and are funded by taxes. (它们的目标是为公众提供服务，并通过税收进行资助。) Public sector organisations function in areas such as health, education, housing and social work. (公共部门的组织在健康、教育、住房和社会工作等领域运作。)

public limited company (PLC) (公开上市公司)

private limited company (Ltd) (私营有限公司)

partnership (合伙企业)

sole trader (个体经营者)

The type of organisations that would be in the private sector are: (属于私营部门的组织类型包括：)

Private sector (私营部门) Private sector organisations, such as a local newsagent or large supermarket chain, are owned and controlled by private individuals. (私营部门的组织，例如当地的报摊或大型超市连锁店，都是由私人个体拥有和控制的。) Their primary aims are to survive and make a profit. (它们的主要目标是生存和盈利。)

Sales revenue of a firm — this is measured by multiplying the unit price of a product by the quantity sold. (公司的销售收入——这是通过将产品的单价乘以销售数量来衡量的。)

Market capitalisation of a firm — this is the stock market value of a company, calculated by multiplying the total number of shares in the business by the current share price. (公司的市值——这是公司的股票市场价值，通过将企业的总股份数乘以当前股价来计算。)

Market share — this measures a firm's sales revenues as a proportion of the industry's sales revenue. (市场份额——这衡量一家公司的销售收入占行业销售收入的比例。)

Number of employees — GlaxoSmithKline is one of the world’s largest pharmaceutical companies, and has around 100,000 employees. (员工人数——葛兰素史克是世界上最大的制药公司之一，拥有大约100,000名员工。)

A business may start as one store and grow over time. (一个企业可能最初只有一家商店，随着时间的推移而发展壮大。)

Small firms, such as local grocery stores and sole traders, co-exist alongside large multinational companies such as Walmart and Toyota. (小型企业，如当地的杂货店和个体经营者，与大型跨国公司如沃尔玛和丰田并存。)

In every economy, there are firms of different sizes. (在每个经济体中，存在不同规模的公司。)

Classification of firms: Size of Company

A small grocery store has to find a way to compete with supermarkets, and it might do so by providing a range of goods which cannot be bought in a supermarket, such as speciality cheeses and wines. (一家小型杂货店必须找到与超市竞争的方法，它可能通过提供超市无法购买的一系列商品来实现，例如特色奶酪和葡萄酒。) The small grocery store may be located in a remote area and be the only local seller of provisions. (这家小杂货店可能位于偏远地区，是当地唯一的食品供应商。) It may provide a personal shopping experience for customers, as compared to a self-service style experience at large supermarkets. (与大型超市的自助购物体验相比，它可能为顾客提供个性化的购物体验。) Smaller shops can also adapt quickly to changing consumer tastes. (小型商店也可以迅速适应不断变化的消费者口味。)

Benefits of being a small firm

Disadvantages of and challenges facing small firms (小型企业面临的劣势和挑战) Small firms do, however, face some challenges: (然而，小型企业确实面临一些挑战：)

1. Small firms have limited start-up capital, which makes it difficult for them to raise finance to establish the business. (小型企业的启动资金有限，这使得它们很难筹集资金来建立业务。)
2. Statistically, small firms have the largest risk of business failure. (统计数据显示，小型企业面临的商业失败风险最大。)
3. The success of small firms very much depends on the abilities and commitment of the owners. (小型企业的成功在很大程度上依赖于业主的能力和承诺。)
4. Small firms often suffer from a lack of continuity. (小型企业常常面临缺乏连续性的问题。)
5. As they are unable to exploit the benefits of large-scale production, small firms have higher unit costs of production. Prices are higher. Or profit is less. (由于无法利用大规模生产的优势，小型企业的单位生产成本较高。价格更高，或者利润更少。)

1. Few legal formalities exist. Easy to set up. (法律手续较少。易于建立。)
2. Start-up costs are also usually much lower. (启动成本通常也低得多。)
3. The sole trader is the only owner of a firm and therefore receives all of the profits made by the business. (个体经营者是公司的唯一所有者，因此获得企业所产生的所有利润。)
4. Being your own boss can have some advantages—own hours. Not taking orders. (做自己的老板有一些优势——可以自行安排时间。不必接受命令。)
5. Small businesses are likely to know their customers on a more personal level, and this can lead to better relationships. (小型企业往往能在更个人化的层面上了解他们的客户，这可以促成更好的关系。)
6. Smaller firms are easier to manage and control. (小型企业更容易管理和控制。)

Advantages of small firms (小型企业的优势) Benefits of small firms include the following: (小型企业的好处包括以下几点：)

Firms can grow either internally (such as increasing their market share) or externally (such as through mergers). (公司可以通过内部增长（例如增加市场份额）或外部增长（例如通过合并）来发展。)

Causes and forms of the growth of firms

Firms can grow by increasing the number of branches (stores) within. (公司可以通过增加分支机构（商店）的数量来实现增长。) Open new stores in new markets and countries. (在新市场和国家开设新商店。)

External growth (外部增长) External growth (or inorganic growth) occurs when expansion involves another organisation, such as through mergers, takeovers and franchises. (外部增长（或无机增长）是指扩张涉及另一组织，例如通过合并、收购和特许经营。)

Internal growth (内部增长) Internal growth (or organic growth) occurs when firms expand using their own resources. (内部增长（或有机增长）是指公司利用自身资源进行扩张。)

Causes and forms of the growth of firms

COKE AND PEPSI MERGED

Mergers (合并) In a merger, two firms agree to form one new company. (在合并中，两家公司同意成立一家新的公司。) Takeovers (收购) By buying a majority stake (share) in another business, a firm can take over the target firm and instantly increase its size. (通过购买另一家公司的大多数股份，一家公司可以收购目标公司，并立即扩大其规模。) Takeovers can be hostile, which means that the firm being taken over does not agree to the buyout. (收购可以是敌意的，这意味着被收购的公司不同意被收购。) Franchising (特许经营) In a franchise, an individual or a firm purchases a licence from another firm to trade using the name of the parent company. (在特许经营中，个人或公司从另一家公司购买许可证，以使用母公司的名称进行交易。)

External Growth

Conglomerate mergers (综合性合并) A conglomerate merger occurs when firms from different economic sectors and in unrelated areas of business integrate with one another. (综合性合并是指来自不同经济部门和不相关业务领域的公司相互合并。) For example, a chocolate company merging with a clothing company. (例如，一家巧克力公司与一家服装公司合并。)

Forward vertical mergers (向前垂直合并) A forward vertical merger occurs when a firm from the primary sector of industry merges with a firm in the secondary or tertiary sector, or when a firm from the secondary sector merges with a firm operating in the tertiary sector. (向前垂直合并是指第一产业的公司与第二或第三产业的公司合并，或第二产业的公司与在第三产业运营的公司合并。)

Backward vertical mergers (向后垂直合并) A backward vertical merger occurs when a firm from the secondary sector merges with a firm from the primary sector, or when a firm from the tertiary industry merges with a firm operating in the secondary or primary sector. (向后垂直合并是指第二产业的公司与第一产业的公司合并，或第三产业的公司与在第二或第一产业运营的公司合并。)

Vertical mergers (垂直合并) A vertical merger occurs when a firm from one economic sector (primary, secondary or tertiary) merges with a firm at a different stage of production. (垂直合并是指来自一个经济部门（第一、第二或第三产业）的公司与处于不同生产阶段的公司合并。) There are two types of vertical merger: backward and forward. (垂直合并有两种类型：向后合并和向前合并。)

Horizontal mergers (水平合并) A horizontal merger occurs when two or more firms in the same industry integrate (join together). (水平合并是指同一行业中的两家或多家公司合并（联合在一起）。)

External Growth. MERGER

Forward vertical: Closer to the final consumers of the product e.g. a manufacturer buying a retailer (向前垂直：更接近最终消费者，例如制造商购买零售商) Backward vertical: Closer to raw materials in the supply chain e.g. a steel firm buying a coal mine (向后垂直：更接近供应链中的原材料，例如一家钢铁公司购买煤矿)

Forward vertical mergers (向前垂直合并)

Backward vertical mergers (向后垂直合并)

External Growth. MERGER

Vertical mergers (垂直合并)

Benefits of Vertical Mergers (垂直合并的好处)

• Increased Control Over Supply Chain (提高对供应链的控制) - Companies can better manage their production processes and supply chains.
• Cost Savings (节省成本) - Reducing transaction costs and improving efficiency through integrated operations.
• Improved Quality Control (提高质量控制) - Greater oversight of production processes can lead to higher quality products.
• Enhanced Market Position (增强市场地位) - Companies can strengthen their competitive position and market share.
• Access to New Markets (进入新市场) - Companies may gain access to new customer bases or distribution channels.

Drawbacks of Vertical Mergers (垂直合并的缺点)

• Increased Costs (成本上升) - The newly formed company may face higher costs due to diseconomies of scale.
• Job Losses (失业) - Duplication of roles and resources can lead to layoffs.
• Reduced Flexibility (灵活性降低) - Larger, merged companies may be less agile and slower to respond to market changes.
• Regulatory Scrutiny (监管审查) - Vertical mergers may attract attention from regulators concerned about market control.
• Cultural Clashes (文化冲突) - Differences in corporate culture between merging firms can lead to integration challenges.

Horizontal mergers (水平合并)

BENEFITS (好处)

• Having higher market share (拥有更高的市场份额)
• Gaining skilled employees from each other (相互获得熟练员工)
• Operating with fewer employees - economies of scale. (以更少的员工运营——规模经济)

DRAWBACKS (缺点)

• There may be a duplication of resources, so some workers may lose their jobs. (可能会出现资源重复，因此一些员工可能会失业。)
• The newly formed, larger firm may face increasing costs arising from diseconomies of scale (新成立的更大公司可能会面临由于规模不经济而导致的成本上升。)

Economies of scale

Economies of scales

External economies of scale are economies of scale that arise from factors outside of the firm, e.g. the location of the firm, proximity to transport, and the availability of skilled workers. (外部规模经济是指由公司外部因素引起的规模经济，例如公司的地点、靠近交通设施和熟练工人的可用性。)

Internal economies of scale are economies of scale that arise from the internal organisation of the business, e.g. financial, bulk-buying, and technical economies of scale. (内部规模经济是指由企业内部组织引起的规模经济，例如财务规模经济、大宗采购规模经济和技术规模经济。)

Economies of scale (规模经济) Economies of scale are the cost-saving benefits of large-scale operations, which reduce average costs of production. (规模经济是大规模运营的节省成本的好处，这降低了生产的平均成本。) Large firms are able to take advantage of economies of scale, which reduce their average costs of production. (大公司能够利用规模经济，从而降低其生产的平均成本。) This gives them a cost advantage over small firms. (这使它们相对于小公司具有成本优势。) The phrase ‘economies of scale’ can be broken down as follows. (短语“规模经济”可以分解如下。) One meaning of the word ‘economy’ is reduced expenditure, or saving. (单词“经济”的一个含义是减少支出或节省。) The word ‘scale’ refers to size. (单词“规模”指的是大小。) Therefore, the term ‘economies of scale’ means that average costs of production fall as a firm grows or increases its output. (因此，术语“规模经济”意味着随着公司成长或增加产出，生产的平均成本下降。)

Economies of scale

Economies of scale

Marketing economies of scale occur as large firms tend to have large advertising budgets, so can spend large amounts of money on promoting their products. (营销规模经济发生在大型公司往往拥有较大的广告预算，因此可以花费大量资金来推广其产品。)

Research and development (R&D) economies of scale occur if large firms are able to fund R&D and therefore can be innovative and create products that enable them to be market leaders. (研究与开发（R&D）规模经济发生在大型公司能够资助研发，因此能够进行创新并创造使其成为市场领导者的产品。)

Risk-bearing economies of scale occur as very large firms, such as conglomerates, produce a range of products and operate in many locations. (风险承担规模经济发生在非常大的公司，如综合企业，生产多种产品并在多个地点运营。) This diversity spreads risks. (这种多样性分散了风险。)

Managerial economies of scale occur if large firms have the resources to employ specialist managers to undertake functions within the firm. (管理规模经济发生在大型公司有资源雇用专业经理来承担公司内部的职能时。)

Financial economies of scale occur as large firms are able to borrow money from banks more easily than small firms because they are perceived by financial institutions to be less risky. (金融规模经济发生在大型公司比小公司更容易从银行借款，因为金融机构认为它们风险较小。)

Technical economies of scale occur when large firms purchase expensive pieces of machinery and automated equipment for the production process. (技术规模经济发生在大型公司为生产过程购买昂贵的机器和自动化设备时。)

Purchasing (bulk-buying) economies of scale occur when the cost of raw materials, components, or finished goods falls when they are bought in large quantities. (采购（大宗购买）规模经济发生在购买原材料、零部件或成品时，当它们以大量购买时，成本下降。)

Internal economies of scale are cost savings that arise from within the business as it grows. (内部规模经济是指随着企业的增长，内部产生的成本节省。)

Economies of scales

External economies of scale are economies of scale that arise from factors outside of the firm, e.g. the location of the firm, proximity to transport, and the availability of skilled workers. (外部规模经济是指由公司外部因素引起的规模经济，例如公司的地点、靠近交通设施和熟练工人的可用性。)

Access to transportation networks — manufacturing firms benefit from being located near major road networks, ports, and cargo facilities. (交通网络的接入 — 制造企业受益于靠近主要公路网络、港口和货物设施。)

Reputation of the geographical area — this provides all firms in the industry with free publicity and exposure. (地理区域的声誉 — 这为行业内的所有公司提供了免费的宣传和曝光。)

Availability of skilled labour — If you are based in a certain area with similar business, you are able to access skilled workers. (熟练劳动力的可用性 — 如果您位于某个有类似业务的地区，您将能够接触到熟练工人。)

Proximity to related firms — A garment manufacturer will benefit from having firms that produce material close by. (与相关公司的接近 — 一个服装制造商将受益于附近有生产材料的公司。)

Examples of external economies of scale include the following: (外部规模经济的例子包括以下几点：)

Economies of scales

Inability to adapt quickly to a changing market - 无法快速适应不断变化的市场

Loss of direction and co-ordination - 失去方向和协调

Lack of motivation - 缺乏动力

Poor communication - 沟通不畅

Diseconomies of scale occur when a business grows so large that the costs per unit increase. As output rises, it is not inevitable that unit costs will fall. Sometimes a business can get too big! 规模不经济发生在企业规模过大，导致单位成本上升的情况。随着产量增加，单位成本未必会下降。有时，企业可能会变得过于庞大！

Diseconomies of scale

Diseconomies of scale

• Internal growth
• External growth
• Mergers
• Economies of scale
• Diseconomies of scale

Key terms

• AO1 Understand how firms may be classified
• AO2 Be able to analyse how and why firms grow
• AO3 Be able to evaluate the advantages and disadvantages of growth

Objectives