CHAPTER 35 ASSESING A CHANGE IN SCALE KEY TERMS

Question 1

WHAT ARE strategic methds

• they refer to

Answer 1

refer to the different strategies a business might pursue to achieve its objectives

Question 2

what is economies of scale

• they occur when

Answer 2

they occur when unit costs fall as a business expands

these economies realte to the volume of output

Question 3

what are economies of scope

-they occur when

Answer 3

occur when a business gains cost advantages by sharing costs between different products and divisions

Question 4

what is the experience effect

Answer 4

the cost advantages that occur

when operating within an indsutry on a large scale

and therfore being able to make better descisions

Question 5

what are diseconomeis of sclae

-they occur when

Answer 5

occur when unti costs increase as a business expands

Question 6

what is overtrading

• it occurs when

Answer 6

it occurs when there are liquidity problems linked to the financing of rapid growth

Question 7

what is the greiner model

• what does it highlight

Answer 7

highlights some of the stages and crisses that businesses typically go through as they grow and get older

Question 8

what is horizontal integration

• it occurs whne

Answer 8

occurs when one business joins together with another business at the same stage of the same production process

Question 9

what is conglomerate integration

• occurs when

Answer 9

he process by which a company expands its operations into unrelated business areas or industries.