1. IGCSE Business Studies
1.3.2 The methods and problems of measuring size

2. Learning Outcomes
Students know the different methods of measuring a businesses size
Students are aware of possible problems when classifying a businesses size
Students understand the limitations of measuring business size.

3. Measuring business size
Which is the biggest car company in the world?
Business size can be measured in many ways
Sales turnover
Output
Employees
Factories
Market capitalisation
Global vehicle sales (m)
Turn-over ($bn)
Market capitalisation* ($bn)
General Motors
8.5
185
16.6
Toyota 7
150
227.9
Ford
6.5
165
13.4
Volkswagen 5 98
39.2
DaimlerChrysler
4.5
170
62.5
PSA/Peugeot Citröen
3.5 60
15.0
Hyundai Automotive
3.1 40
1.0
Nissan 3 65
54.0
Honda
2.9 77
67.7
Renault
2.4 42
34.0
* Stock market value on 18/12/06. Data from

4. Task – motorcycle report
You are a business consultant asked by the motorcycle manufacturer Hanbo to write a brief report to the Managing Director comparing the company’s size with three others in the same industry:
Place the four companies in order of size for each of the three measures.
Give an overall order for the four companies. Explain your reasoning
Conclude by explaining why is it difficult to state a definite order of size
Workers employed
Capital employed (£ million)
Sales (£ million)
Hanbo
20,000 50
100
Triumf
5,000
150
200
Dukati
3,000 60
BWM
15,000
180 *
Note: The data is of course completely fictional!

5. So…What Are the Problems When Trying to Measure Business Size?

6. Research Task Choose a Market
Identify the 3 largest companies in that market
How did you measure them?
Did you have any problems?

7. Limitations Method Limitation Number of Employees
Machines can replace employees
Level of skill not accounted for
Sales
Does not account for promotions
Market Share
Land Size
Technological developments allow for virtual business
Market Capitilsation
Share prices vary daily

8. Quiz Which is the larger business: Google or Toyota? BSM or ISM?
Globe or Smart?
Amazon or WallMart?