9.1/9.2 Flashcards
What is innovation?
when a new idea is brought to fruition and turned into a good or service
Pressures of innovation?
PEST-C
What is process innovation?
improving how to run the business
How to become an innovative organisation?
- Acceptable to fail
- Funding
- Sharing ideas
- Teamwork
Types of protecting innovation?
Copyright Trademark Patents Design Rights Registered Design
What is disruptive innovation?
Innovation that creates a new market
What is price discrimination?
when firms with monopoly power charge different groups of consumers different prices for the same product.
Categories of price discrimination
First Degree
Second Degree
Third Degree
What is first degree discrimination?
Maximum possible price for individual consumers
What is second degree discrimination?
Maximum price to different groups of consumers
What is third degree discrimination?
Firms identify groups of consumers with similar characteristics
What are the methods of growth?
Merger
Takeover
Venture
Franchise
Advantages of selling a franchise?
Quick growth
Franchisees may be very motivated
Disadvantages of selling a franchise?
Do not gain all profits
Lose complete control
Advantages of buying a franchise?
Don’t need to think of new ideas
Provided with training
Disadvantages of buying a franchise?
Do not have complete independence
Do not gain all profits
Types of integration?
Vertical
Horizontal
Conglomerate`
Benefits of growth?
Economies of Scale
Economies of Scope
Synergy
Experience Curve
Problems of growth?
Diseconomies of scale
Overtrading
Greiner growth model phases?
Phase 1: "Growth through creativity" Leadership Crisis Phase 2: "Growth through direction" Autonomy Crisis Phase 3: "Growth through delegation" Control Crisis Phase 4: "Growth through coordination" Red Tape Crisis Phase 5: "Growth through collaboration" Growth Crisis Phase 6: "Growth through alliances"
What is retrenchment?
When a business reduces the scale of its operations
Why retrench?
Diseconomies of scale
Changes in market conditions
Causes of internationalisation?
Trade agreements
Improvements in transport
Improvements in communication technology
Internationalisation opportunities?
Buy from abroad
Sell abroad
Produce abroad
Methods of entering international markets?
Exporting
Licensing
Alliances/Ventures
Direct investment
What makes a market attractive?
Size and growth of market Costs Degree of competition Risk Culture
Why buy from abroad?
Lower costs
Quality
Technology
Skills/expertise
Why re-shore?
Problems maintaining quality
Problems with delivery
Costs
