Advantages and disadvantages of enterprise scale expansion

First, the advantage is that enterprises operate more products, expand more channels and increase profit points. Disadvantages: a lot of money has been invested in business development, and the increase of personnel input inventory has also increased relatively.

Second, 1. It is very likely that new shareholders will join in the expansion of enterprises, and there will be huge problems in the consistency and harmony of shareholder ideas, which is also directly related to the future direction of enterprises.

2. Management problems, the expansion of enterprises will inevitably lead to the increase of employees and even subordinate departments. How to avoid overlapping, overstaffing and inefficiency is another problem.

3. The capital problem, in two aspects, may be due to the expansion of enterprises and the birth of new projects, and may also be due to a large number of short-term financing and excessive cash reserves, which can not be used in time and effectively, bringing losses to shareholders' investment. 4. Desire expansion, the top management of the company often has a common problem, that is, after the expansion of the enterprise, the desire can not be contained, the market will expand blindly, and the final result is self-evident.

5. The saturation of market expansion, a company has a saturation for the market segmentation of its industry. Usually, the death of small companies is not the worst or the fastest, and medium-sized companies are the most dangerous, because the expansion and transformation of enterprises will inevitably require the change of overall management and marketing concepts, which involves a problem of personnel arrangement and project planning.

Three, the enterprise scale refers to the concentration of production factors and product output in industrial enterprises, such as means of production, employees, etc. A that represents the size of the enterprise organization. With the expansion of enterprise scale, economic benefits are also increasing, which is called enterprise scale economy. On the one hand, the expansion of enterprises is to reduce the internal costs of enterprises in order to obtain economies of scale; On the other hand, it is to strengthen the competitiveness in the market. In short, the expansion of production scale can make enterprises gain the advantage of cost leadership and make the production cost of enterprises at the lowest level in the industry. At present, with the social division of labor and the development of specialization and cooperation, the importance of economies of scale has gradually emerged, and the pursuit of economies of scale has increasingly penetrated into various economic activities. The fundamental reason is the expansion of enterprise scale. Through effective ways, such as enterprise merger and acquisition, enterprise financing, brand extension, chain operation, etc. The scale of enterprises can be expanded, so as to realize economies of scale and maximize profits. Therefore, it is of great practical significance and theoretical research value to explore ways to expand the scale of enterprises.