Syllabus: Cambridge - IGCSE Business Studies
Module: 1.3 Enterprise Business Growth and Size
Lesson: 1.3.3 Why Some Businesses Grow and Others Remain Small

Introduction

This lesson forms part of the Cambridge IGCSE Business Studies syllabus, specifically Topic 1.3.3: Why Some Businesses Grow and Others Remain Small. It introduces students to strategic decisions related to business size and expansion—an essential aspect of commercial awareness and organisational strategy. As part of the broader theme Enterprise, Business Growth and Size, this topic helps learners develop insight into the practical challenges and opportunities businesses face.

Understanding why some firms pursue growth while others remain small aligns strongly with both workplace readiness and decision-making capabilities. These are essential for students aiming to navigate or lead within any organisation in future careers. The content also links to Gatsby Benchmark 4, by embedding curriculum learning in real business contexts.

Key Concepts

Students will need to grasp the following key points, as outlined by the Cambridge IGCSE specification:

• Motives for Growth: Including increased profits, economies of scale, greater market share, risk spreading, and increased status or brand recognition.

• Methods of Growth: Organic (internal) growth through reinvestment, increased output, or new locations; and external growth through mergers, takeovers, or strategic alliances.

• Barriers to Growth: Including limited access to finance, managerial challenges, market saturation, or desire to retain control.

• Why Businesses Remain Small: Deliberate choice for lifestyle reasons, niche markets, owner independence, or avoiding regulatory complexity.

• Impact of Growth on Stakeholders: Including changes for employees, customers, suppliers, and owners—positive and negative.

These concepts introduce students to strategic decision-making and organisational behaviour, both foundational for higher-level study and workplace readiness.

Real-World Relevance

This topic is rich with current and relatable case studies. Consider the following examples:

• Greggs PLC has grown steadily through organic growth, expanding outlets across the UK while maintaining affordability and brand identity.

• Innocent Drinks, despite acquisition by Coca-Cola, retains a relatively small operational size in terms of headcount and culture, showing how businesses can remain “small” in some ways even when backed by global giants.

• Family-owned bakeries, freelance services, and niche tech start-ups often choose to stay small to maintain autonomy, personal values, or manageability.

These cases show how growth is not always the end goal. For many, stability, identity, and control outweigh scale, and understanding this nuance is vital in fostering commercial awareness.

How It’s Assessed

Students may encounter this topic in various forms of assessment:

• Short-answer questions testing knowledge of reasons for or against growth.

• Data response questions where students analyse a business scenario to recommend whether growth is suitable.

• Extended writing (6–8 mark questions) requiring evaluation of the benefits or drawbacks of growth for different stakeholders.

Command words include:

• “Explain” – often used for outlining reasons a business may or may not grow.

• “Analyse” – used when examining the impact of growth strategies.

• “Evaluate” – commonly used when judging whether a business should grow, using case-based context.

Encouraging students to structure answers using point–explain–impact–example will help them meet top assessment criteria.

Enterprise Skills Integration

This topic builds key workplace and enterprise competencies:

• Strategic Thinking: Students assess growth decisions, including risks and rewards.

• Stakeholder Awareness: Analysing how growth affects various internal and external groups builds empathy and commercial understanding.

• Decision-Making: Judging when growth is desirable or feasible simulates real-life business leadership dilemmas.

• Financial Literacy: Concepts like economies of scale or reinvestment introduce numeracy in a commercial setting.

These are reinforced through Enterprise Skills tools such as simulations and active learning sessions which, according to research, increase comprehension by up to 73% over traditional methods.

Careers Links

This lesson naturally connects to Gatsby Benchmarks 4 and 5, offering clear links to career paths where understanding business scale is crucial. Relevant careers include:

• Entrepreneurs and Start-Up Founders – making strategic decisions about size, control, and risk.

• Marketing Managers – considering the implications of growth on brand and consumer reach.

• Operations or Project Managers – scaling outputs efficiently while managing resources.

• Finance Professionals – assessing growth viability through budgets, forecasts, and return on investment.

By embedding this topic in discussions around real roles and employer expectations, students begin to understand how theory translates into professional readiness.

Teaching Notes

Tips for Delivery:

• Start with two contrasting case studies: one global (e.g. Amazon), one local (e.g. a neighbourhood café). Ask students: why did one grow while the other stayed small?

• Use role-play or simulation tools to let students make business growth decisions and see the outcomes.

• Encourage use of news articles to identify current examples of growth strategies and their impacts.

Common Pitfalls:

• Students may assume growth is always positive. Emphasise that growth comes with risk, costs, and sometimes loss of culture or control.

• Confusion between organic and external growth – reinforce with real examples and visuals.

Extension Activities:

• Invite local entrepreneurs or alumni to speak about their decision to grow or remain small.

• Link to maths by calculating revenue needed for break-even expansion.

• Cross-reference with marketing (impact of scale on brand) or operations (production limits and logistics).