2.1.1 Market power

Question 1

increased market power with growth

Answer 1

• Market power = extent to which one business can affect another in a market
• Most power = market leader (business) → control over prices and marketing strategies
• Important reason for growth is to achieve m power

Question 2

monopoly power

Answer 2

• Monopoly power → business with the biggest market share; can influence price/output
• Consumers have to pay a higher price than they would if the market were more competitive

Question 3

monopsony power

Answer 3

• Monopsony → big buyers of supplies = monopsony power (supermarkets)
• Dictate prices and terms to small suppliers, this drives down input costs and increases profitability

Question 4

increased market share and brand recognition with growth

Answer 4

• Increase m share, increased turnover, profit and m power
• To increase market share, you must have competitive advantage
• Prod differentiation → brand loyalty give a business a reliable and profitable market, marketing
• Brand can charge a higher price

Question 5

increased profitability of growth

Answer 5

To increase profit
- Increase market share
- Product differentiation
- Brand loyalty
- Advertising
- Enhanced quality
- Keeping costs down

MES: where businesses grow for a long time and become steadily efficient and productive (minimum efficient scale)
- All businesses strive to achieve MES

Question 6

internal communication and dos

Answer 6

• Larger firm = harder to manage
• Effective communication becomes harder as the organisation grows, mistakes may be made
• Flows of information can be slow or lost, employees and managers can feel remote or de-motivated
• Managing and coordinating a larger organisation becomes progressively harder as it expands

Question 7

potential skill shortages and dos

Answer 7

• Employment problems
• Specialisation on production lines can lead to workers becoming alienated, boredom increases, mistakes rise, absenteeism increases and production falls
• Expansion can lead to skill shortages + recruiting more skilled workers is costly to ensure adequate capabilities

Question 8

what is corporate culture

Answer 8

• shared values of a business
• beliefs and norms that affect every aspect of work life
• behaviors that are typical of day to day behavior

Question 9

what is a strong corporate culture

Answer 9

• Employees believe in the corporate culture and support it
• Staff tend to be more loyal
• Staff turnover goes down
• Mutual respect between management and employees grows, fostering creativity
• Motivation tends to be higher
• Good communications exist
• A strong culture may encourage superior performance

Question 10

what is a weak corporate culture

Answer 10

• Employees do not support the corporate culture
• Productivity and motivation are likely to be low
• There is a danger of developing an ‘us and them’ mentality (stakeholder conflict)
• Capable staff may move on, leaving disaffected and incompetent staff behind
• Stadd need to be forced to comply policy and rules
• End results tends to be poor performance

Question 11

why might a corporate culture need changing

Answer 11

• improved business performance –> declined profits and sales, inadequate returns on investment, low quality or standards of customer service
• respond to significant change –> market changes, political + legal environment, change of ownership, change of management or leadership, economic conditions

Question 12

how is corporate culture demonstrated

Answer 12

• employee recruitment
• visitor and guests treatment
• working space organisation
• degree of delegation and individual responsibility
• contract negotiation and agreement
• personality and style of the sales force
• responsiveness of communication
• methods used for communication

Question 13

barriers to cultural change

Answer 13

• loyalty to existing relationships
• failure to accept the need for change
• insecurity
• preference for the existing arrangements
• different person ambitions
• loss of power, skills, income, the unknown, inability to perform as well in the new situation break up of work groups

Question 14

innocent corporate culture

Answer 14

• aim to be healthy
• natural surroundings, different
• teambuilding, table tennis
• product differentiation, customer service
• employee satisfaction, key stakeholders, more efficient
• casual cllothing
• core values enforced
• all employees treated equally

Question 15

apple corporate culture

Answer 15

• creativity and innovation
• top notch excellence, firing employees who are not up to standard
• secrecy and widespread agreement –> ensures industry leadership
• meritocracy

Question 16

goldman sachs corporate culture

Answer 16

• 2am presentations
• 100 hour weeks
• mental health issues
• toxic masculinity
• trying to improve