2.1 (Business Growth & Competitive Advantage) Flashcards

Question

Pros and Cons of conglomerate integration

Answer 1

+ can spread & reduce risk + greater market power + increased revenue + flexibility + cross-selling opportunities + economies of scale - can cause a drain & reallocate resources away from successful businesses - owners may lack necessary knowledge

Answer 2

Having an edge over rival products - developing new strategies for external change - ensuring adequate finance is available - knowing customer wants & needs - ensuring provision of top quality product/ service - assessing organisational strengths & weaknesses - using new & appropriate technologies

Answer 3

- quality, innovation & new features can be valued more than low prices by consumers - big businesses compete in innovation within an industry e.g tech giants - larger firms may watch smaller firms make breakthroughs and try to attempt takeovers

Answer 4

Product innovation: creation of new goods & services or improvements to a previous version e.g design alterations to Iphones Process innovation: changing the way something is produced, normally to reduce average costs e.g McDonald's assembly line food production system

Answer 5

Incentive of increased market power: - it can improve differentiation, brand image & customer loyalty - by gaining market power they can be competitive without relying on price changes & set their own prices - increased profits from this can be reinvested in R & D + they remain ahead of their rivals by using their size & power to maintain innovation others can't match

Answer 6

+ improved productivity + better quality + building a product range + may handle legal & environmental issues + more added value + improved staff retention & easier recruitment - competition - uncertain commercial returns - availability of finance

Answer 7

- grants & loans to encourage more industry to come to an area - incentives or subsidies for businesses as an investment into innovation + nurture businesses so their funds can be invested back into the economy + encouraging more industry may decrease unemployment + it is crucial in increasing productivity, GDP & living standards + product innovation can benefit consumers, raise exports & create jobs

Answer 8

- large companies entitled to 11% corporation tax relief on R&D spending - sponsors Innovate UK which offer grants & advice to stimulate & support innovation - £102m invested in hydrogen & nuclear innovation to increase energy sovereignity - £110m in next en 5G & 6G tech + expensive + foreign businesses may not re-invest back into the UK + firms may import their own workers not local people

Answer 9

a series of 5 stages which typical products go through between their first introduction & eventual decline in sales 1) R&D- only costs & may include testing & market research 2) Introduction- few sales & low profitability + potential for high market growth w promotion 3) Growth- sales & profitability growing + needs to invest to strengthen market position 4) Maturity- strong market share & profit + market growth low (saturation) 5) Decline- slight profit/loss + further promotion or termination

Answer 10

- no set length - generally fashion, technology & growth of competition via innovation shorten them + hard to decide which section a product is in + most effective in stable markets + ignores continuous improvement + some products die after intro + cannot show any future sales

Answer 11

Ways in which a business attempts to prolong the mature phase of a product's life cycle + improving/updating products + advertising + price changes + adding value + targeting a new market/segment + repackaging, rebranding or repositioning (Lucozade rebranding into 'sports drinks')

Answer 12

economic activity that results from billions of everyday online connections among people, businesses, devices, data & processes - undermining conventional notions about how businesses are structured & how they interact and obtain information, goods & services + Uber own no vehicles themselves + 9-5 commute vs WFH + Labour & capital vs automation & AI

Answer 13

Hyper connectivity & the Internet of Things (IOT): physical objects embedded with sensors that communicate w computers + e-Commerce + digital wallets + digital marketing

Answer 14

1) Price Comparison Sites 2) Viral Marketing 3) Social Media + style of promotion that relies on an audience to organically generate & push the message of the product or service + when it is being shared rapidly by the public at large rather than just the target audience

Answer 15

+ global reach + increased brand awareness + improved customer service & insights + easy content distribution + improvement of SEO + direct connection w audience + cost efficiency - time & resource commitment - difficulty in measuring ROI - risk of public negativity - dependence on platform algorithms - data protection & security concerns (growth, driving traffic, customer support, PR, reputation management & being found)

Answer 16

1) Micro-marketing 2) Online Retailing & Distribution 3) Recruiting & training staff with digital skills + an approach to advertising that tends to target a specific group of people in a niche market + products/services marketed directly to a target group of consumers + online behaviour tracked via cookies e.g personalised products or nano-influencers

Answer 17

OR: type of e-commerce whereby a business sells goods & services directly to consumers from a website OD: overarching strategy for systematic distribution via all relevant e-commerce channels + lower supply chain & distribution costs + cheaper & quicker for start ups + not location based + ability to react quickly to customer tastes + ability to change prices quickly + customers can shop at any time - consumer concerns about security & privacy of information - delays in delivery - inconvenience w damaged/returned goods - overcome distrust - advertising & website costs - legal issues

Answer 18

There is a digital skills gap (shortage of digital skills in the workforce) - 75% of employers finding it difficult to recruit people w the right skills - employers must train employees or offer higher wages/ benefits to attract skilled workers - younger people may have an advantage in the recruitment process + Bangladesh - many countries turning here for IT outsourcing leading to a boom in freelancing - 2nd largest supplier of online labour

Answer 19

- machines currently complement human workers but may replace some jobs in the future + jobs that rely on interpersonal interaction are what machines are currently bad at so these jobs are relatively 'safer' + allows people to monetize their assets + training can be used to help people combat digitisation (only 36% of UK employers had invested in AI-enabled technologies by 2021/22)

Answer 20

1) Long Tail & Wider Geographical Markets 2) proliferation of choices, with increasing ability to match the precise niche market needs of individuals & small groups, reducing dominance of standard 'hits' - small niche companies can find their audience e.g Cambridge Satchel Company - companies can sell many different items to consumers 3) digitalisation has led to globalisation and a wider possible consumer base & increased competition

Answer 21

- internet allows businesses to expand their customer base & increase sales - it increases competition meaning firms have to be dynamic to change or they risk falling behind & facing financial losses - by not requiring a physical presence firms can slash costs & offer attractive prices to consumers - parts of it may not be open to intense competition meaning gains may not be shared equally + the market is now opened up allowing new competing firms to be created + firms now offer goods & services on multiple platforms + the market is creatively destructive and it is necessary for some businesses to collapse in order for others to succeed

Answer 22

1) Netflix - facing competition from other, cheaper streaming services - having to invest heavily in new content 2) DeepSeek & ChatGPT - DeepSeek offers essentially the same services but cheaper

Answer 23

+ contributes to economic growth + expands business opportunities + creates new jobs + improves public services + rise in e-commerce + transparency + digital delivery of goods and services - monopoly power of tech giants - less community - addictive nature of tech - privacy issues - bypassing of labour laws - disruption to traditional economy & jobs

Answer 24

- less risk involved on a smaller scale - business objectives may be satisficing - demanded may be limited - may ruin relationships w customers if they become too large - technology can work to the advantage of small businesses e.g Long Tail + it means they are able to exploit their size to offer a more individualists products & customer experience as they are unable to compete on price

Answer 25

+ product differentiation & USPs + targeting niche markets + flexibility in responding to customer needs + customer service + achieving competitive advantage via relationships w stakeholders + price inelasticity of niche products + where diseconomies of scale may set in - innovation (e.g e-commerce) - architecture (e.g shared strategy) - reputation (e.g customer service)

Answer 26

Guru Nanda - essential oils & diffusers took off during lockdown Lovely Leaps - hosted virtual dance classes online