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A-level Business (year 13) > 3.9-Strategic Methods > Flashcards

3.9-Strategic Methods Flashcards

1
Q

Growth

A

Increasing the size of a businesses operations

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2
Q

State Reasons For Growth

A

-increase shareholder value
-increase market share
-reduce average costs

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3
Q

Retrenchment

A

Downscaling the size of a businesses operations

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4
Q

Reasons for retrenchment

A

-improve poor performance
-restructure to increase efficiency

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5
Q

Examples of internal growth (organic)

A

-employ more staff
-open new stores
-innovation/ new products/services
-increase marketing

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6
Q

Examples of external growth (inorganic)
(and explain what they are)

A

-working with other businesses
-mergers (50:50 shares)
-takeovers (x>50 shares)
- outsourcing (joint venture)
-franchising

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7
Q

Joint venture

A

where one business will use another business to produce products or components of their products but both businesses have separate identities

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8
Q

Integration of businesses

A

The bringing together of two or more businesses (eg. mergers, takeovers etc)

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9
Q

What is horizontal external growth?

A

When two businesses at the same stage within a process integrate (similar size of business)

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10
Q

What is vertical external growth?

A

when two businesses at different stages integrate (different size of business)

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11
Q

What is forward vertical external growth?

A

when a business integrates with a business ahead of them in the process ( a larger business)

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12
Q

What is backward vertical external growth?

A

when a business integrates with a business behind them in the process ( a smaller business)

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13
Q

a conglomerate

A

when two unrelated businesses integrate

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14
Q

Economies of scale

A

when a business can reduce their costs by producing or buying in bulk

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15
Q

Economies of scope

A

when a business is able l to make a range of products using the same facilities/skills/staff to reduce costs

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16
Q

What does the expertise curve suggest?

A

The more products a business makes the more experienced they become and the cost per un it goes down as experience increases

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17
Q

What are the 6 phases of Greiner’s Growth model?

A

growth through:
1. Creativity
2. Direction
3. Delegation
4. Coordination and monitoring
5. Collaboration
6. Alliances

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18
Q

Explain phase 1 of Greiner’s growth model

A

Growth through creativity
-beginning of business
-staff levels low
-likely to be small (soletrader)
-informal communication

when communication starts to fail it leads to a leadership crisis

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19
Q

Explain phase 2 of Greiner’s growth model

A

Growth through direction
-now being managed
-communication formalized
-regular meetings
-functional areas

-workload is excessive causing an autonomy crisis

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20
Q

Explain phase 3 of Greiner’s growth model

A

Growth through delegation
-middle managers appointed and empowered
-decisions may only benefit specific functions rather than the whole business (poor communication)

period of growth is ended by a control crisis

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21
Q

Explain phase 4 of Greiner’s growth model

A

Growth through coordination and monitoring
-business continues to expand
-departments are working together
-performance related pay may be introduced

growth is ended by a red tape crisis
-paper based monitoring leads to inefficient bureaucracy
-business slow to respond to external changes

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22
Q

Explain phase 5 of Greiner’s growth model

A

Growth through collaboration
-business must now switch from a functional management structure to a matrix style
-functional specialists from different areas will work together in project teams

When they can no longer grow internally they may suffer with a growth crisis

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23
Q

Explain phase 6 of Greiner’s growth model

A

Growth through alliances
-Greiner suggests that most businesses will stop growing due to running out of ideas
-to grow they need to form alliances (mergers, takeovers, joint ventures etc)

24
Q

what are some critiques of Greiners model?

A
  • not every business will face a crisis
    -some will successfully anticipate change
    -ignores pace of growth
25
Q

Synergy

A

The concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts

26
Q

Overtrading

A

overtrading occurs when a business expands too quickly without having suitable sources of finance to support expansion

27
Q

Innovation

A

The development of an idea into a new product or process

28
Q

What are the two types of innovation?

A

-product innovation
-process innovation

29
Q

Product innovation

A

changing a product that already exists or making a new product

30
Q

Process innovation

A

Changing a process that already exists or introducing a new process

31
Q

Intraprenurship

A

businesses encouraging employees to act like entrepreneurs for the business

32
Q

Benchmarking

A

The process of identifying best practice within an industry

33
Q

What is the benchmarking process?

A
  1. Identify areas that can be benchmarked
  2. collect quantitative data
  3. Identify good practice
  4. compare performances to identify areas of weakness
  5. set new targets
  6. implement procedure to achieve these targets
  7. review progress
34
Q

Patent

A

Protects new inventions

35
Q

Copyright

A

gives legal protection against copying for authors, composers and artists

36
Q

Big Data

A

The vast amount of data generated by the technological devices that we use daily

37
Q

Data Mining

A

The process of sifting through this data to try and identify trends and relationships

38
Q

Enterprise Resource Planning (ERP)

A

this is software used by businesses to collect, store, manage and interpret data from different business functions

39
Q

What are the axis on the Bartlett and Ghoshal’s model?

A

cost pressure and local responsiveness

40
Q

What does the experience curve suggest?

A

The more products produced the lower the cost per unit due to experience of owner

41
Q

What happens in the experience curve?

A

•⬆️experience
⬇️
•⬆️efficiency
⬇️
•⬇️cost per unit
⬇️
•cost advantage
•lower prices
•increase market share
Then becomes a monopoly and benefits from economies of scale

42
Q

What are the 4 parts of Bartlett and ghoshal’s model?

A

•global
•transnational
•international
•multi domestic

43
Q

What are some methods to entering international markets?

A

•exports
•licensing
•alliances
•direct investment

44
Q

Exports

A

Selling goods and services produced in one country to another country

45
Q

Licensing

A

A business gives permission to a third party to sell their goods or services abroad

46
Q

Alliances

A

Forming partnerships with one or more businesses operating in another country

47
Q

Direct investment

A

Capital expenditure to establish a physical presence in another country

48
Q

On Bartlett and ghoshals model what is global?

A

•high pressure to reduce costs and benefit from economies of scale
•low pressure to localise

49
Q

On Bartlett and ghoshals model what is transnational?

A

•high pressure to reduce costs and benefit from economies of scale
•high pressure to localise

50
Q

On Bartlett and ghoshals model what is international ?

A

•low pressure to reduce costs and benefit from economies of scale
•low pressure to localise
Tend to be very large established businesses eg. Macdonalds

51
Q

On Bartlett and ghoshals model what is multi-domestic?

A

•low pressure to reduce costs and benefit from economies of scale
•high pressure to localise

52
Q

On greiners model of growth during the first phase(creativity) what crisis may they face?

A

Leadership crisis

53
Q

On greiners model of growth during the second phase (direction) what crisis may they face?

A

Autonomy crisis

54
Q

On greiners model of growth during the third phase (delegation) what crisis may they face?

A

Control crisis

55
Q

On greiners model of growth during the fourth phase (coordination) what crisis may they face?

A

Red tape crisis

56
Q

On greiners model of growth during the fifth phase (collaboration) what crisis may they face?

A

Growth crisis
(They run out of ideas so must grow externally)

A-level Business (year 13) (4 decks)

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