Key Concepts

Question 1

Globalisation

Answer 1

The growing interdependence, integration and general connectedness of the world through markets, labour mobility and capital transfer.

Question 2

Impact of the Internet

Answer 2

The Internet has flattened the competitive playing field.

• educated people –> larger skilled labour force
• made marketing cheaper, faster and more effective
• made the potential market global
• increased transparency of companies and forced them to be more ethical
• increased the range of products

Question 3

Impact of Globalisation

Answer 3

Global hyper-competition: People now not only face competition from domestic and international markets but potentially from any region on earth.

With delivery and transport costs falling and the increasing use of online retailing, businesses requires hard work to earn their place in the market and can take nothing for granted.

Globalisation represents the key driving force for business management. It has driven both economic and socio-political change that has forces businesses to become more innovative and retain their place in their own market.

Greater transparency through the world wide web via communication and social media has promoted much greater awareness of ethical issues, leading to all business having to consider new strategic options.

Moreover, greater transparency and “connectedness” through the Internet has heightened the need to be sensitive to different cultures.

Question 4

Change

Answer 4

The world is changing economically, socially, environmentally, and politically at a rate, which is “unprecedented”. Because of that exponential change, businesses have to constantly review their operations to earn their market place, given the significant changes in external factors and the onset of globalisation.

Question 5

Innovation

Answer 5

Innovation occurs when an invention becomes successful in the market place. The product attracts customers and is economically sustainable.

Question 6

Innovation is either….

Answer 6

Fundamental or disruptive: changing consumer behaviour indefinitely (e.g. iPad)

Incremental: improvements or modifications to existing products resulting in added value (e.g. iPad Mini)

Question 7

Importance of Innovation

Answer 7

With hyper competition, the only way for business to defend themesleves is through innovation. Knowledge is now a commodity and knowledge advantages will disappear very quickly. A key question, which companies need to ask themselves, is how can I create new knowledge?

Innovative culture at work where experimentation and enterprise is encouraged.

Question 8

Ethics and Transparency

Answer 8

Increasing Internet usage, persavive social networking have faced companies to be more transparent and, by assumption, more ethcially responsible.

The risk of receiving damaging negative publicity is too great for business to bear.

Question 9

New goals should be considered…

Answer 9

SMART

specific

measurable

achievable

realistic

time bound

Question 10

Blue- and Red Oceans

Answer 10

The key for businesses operating in a global market with hyper competition is to develop a new “blue ocean” strategy: a plan that attemps to make the compeitiion irralevant by creating an uncontested market-place, create and captire new demand, and using differentiation and low cost.

Question 11

enterprise

Answer 11

risk-taking of an entrepreneur using the three factors of production to produce something of added value

strong links to sustainability

Question 12

cultural intelligence (CQ)

Answer 12

glocalisation, adapting to consumer values and contemporary wants

Question 13

good case studies

Answer 13

Lego

Google

Facebook and other social media

Disney and Pixar

Apple