Small Business Survival in Competitive Markets
- Many firms start small & will grow into large companies or even multi-national corporations (Amazon started in a garage)
- While many firms grow, others do not or they intentionally choose to remain small
Reasons Why Small Firms Exist
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- Many changes in technology favour large scale operations but others can work to the advantage of small firms
- The Internet offers low cost access to market for many firms
- With effective use of technology to cater for the precise needs of small market niches, small firms can thrive
- This is especially true where technology reduces the cost differential between the mass produced and the niche product
- Thus modern technology can work in favour of the small-scale and personalised rather than the mass produced and impersonal
- Niche markets can be targeted profitably by small firms that have relatively small overheads and do not need to achieve the volume of sales required by larger competitors