Business growth and decline Flashcards
What is the Business cycle?
The different stages a business and/ or its product will often go through over the course of its existence
What is the establishment stage of the business?
The establishment stage of the business life cycle is when the business first enters the market.
What are the four stages of the business
Establishment, Growth, Maturity and post maturity
What is the growth stage of the business?
The growth stage of the business life cycle offers the business many exciting opportunities and presents it with new challenges
What is the maturity stage of the business?
In the maturity stage of the business life cycle the businesses growth and market share begin to slow. The business faces increased competition
What is the post maturity stage of the business?
The post-maturity stage is the final stage of the business life cycle. during this stage key decisions will be made that ultimately will affect the long-term survival of the business.
What are the four paths a business can take after post-maturity?
Steady state, Renewal, decline and cessation
What is the definition of steady state?
The path in the post-maturity stage of the business life cycle when the business maintains its position
What is the definition of decline?
The path in the post-maturity stage of the business life cycle when a business experiences falling sales and has been unsuccessful in developing new strategies
What is the definition of renewal?
The path in the post-maturity stage of the business life cycle when a business develops new marketing strategies or releases new products to help increase sales.
What is the definition of competitive advantage?
Those features of a product or business that provide it with an advantage over its competitors.
What is the definition of cessation?
The path in the post-maturity stage of the business life cycle when the business closes. Cessation can be voluntary or involuntary.
What is the definition of Just in time method
A stock-control system whereby the business is able to access stock just when it needs it.
What is cessation?
Cessation refers to the closure of a business. The owner may decide to cease the operation of the business for a number of reasons.
What is the Post-maturity stage?
The challenges for the business during the post-maturity stage are dependent on the path that its managers decide to follow. It is important that the business:
What is the Maturity stage?
Challenges faced by a business during the maturity stage include: • needing to develop strategies to maintain customer loyalty and interest in its product • motivating employees and management so that tasks do not become routine and boring • the need to develop new products or revitalise existing products • ensuring the financial position of the fi rm at this stage is suffi cient to cover short- and long-term expenses and provide investors with a suffi cient rate of return • maintaining an active interest in the external environment of the business in order to be aware
What is the definition of Involuntary Cessation
Occurs when the closure of a business is forced on its owner.
What is the definition of the voluntary cessation?
Occurs when the owner of a business decides to cease its operations. The decision is not forced on the owner.
What is the definition of insolvency?
When a business cannot pay all its liabilities, both current and non-current. Abusiness that is insolvent will most likely fail because creditors will demand repayment and the business cannot afford to pay loans without selling assets.
What is the definition of Receivership?
p A situation whereby an independent manager (receiver) has been appointed by the court to administer a business that has become insolvent. A receiver can either trade the business out of financial trouble or liquidate its assets and close the business to recover an outstanding debt
What is the definition of liquidation?
Occurs when all the assets of a business are sold to generate cash to pay liabilities and creditors.
What is the definition of Bankruptcy?
A legal declaration that a person or business has more liabilities than assets
