Introduction To Business Flashcards
How do stakeholders benefit from a large business
Employees-
+there will be more jobs available, greater job security, more job opportunities and a chance to develop in career.
-might feel really demotivated meaning productivity will be low
- problems of effective coordination
Customers-
+large businesses provide more of a variety and better quality of things whereas small businesses offer small personalized products.
- customers might we swayed into products they don’t want to buy
Government-
+large businesses contribute more to tax revenue
-may face greater regulatory scrutiny
Organic growth
What’s achieved by increasing the firms sales
This is done through selling more to existing customers, finding new customers or both
Merger and acquisitions
This is where 2 businesses come together to form a new larger business.
A takeover requires acquiring control of another company by buying their shares and if this is successful the target company will continue to exist as a independent legal entity controlled by the acquirer
Joint venture
Formal business arrangement between 2 or more businesses who commit to work together on a particular project.
Both parties invest time, money and effort in the project
Its different to a merger as there’s no change of ownership involved for either firm
It will result in the creation of a new business or implement the venture.
E.g. virgin mobile India
The 2 companies don’t have to operate in the same country
Why undertake a joint venture
- it might be too expensive so by coming together costs can be shared and cheaper
- might be too risky so doing it with another business is less of a risk
- a way to gain access to markets and resources
Strategic alliance
A partnership where companies work together for mutual benefit but remain independent
E.g.starbucls and barnes and noble collaborating to offer coffee in bookstores
Evaluate the impact and importance of joint ventures to a business and its stakeholders
Businesses-share risks and resources meaning access to markets
Employees-potential for skills exchange and more job opportunities
Customers- access to enhanced products
They allow businesses to reduce any financial risks, share expertise, expand market presence without fully merging
Evaluate the impact and importance of a strategic alliance to a business and its stakeholders
Businesses-share resources and market access without fullly merging
Employees- potential for exposure to different business practises
Customers- enhanced product or service offerings
They are crucial for entering new markets, sharing tech and maintaining competitiveness without the commitment of a merger
