Strategy and implementation strategy growth

Question 1

What are some methods of growth?

Answer 1

Merger
Franchising
Takeovers

Question 2

What is horizontal intergration?

Answer 2

When 2 businesses in the same stage integrate.
Facebook buying instagram

Question 3

What is vertical integration?

Answer 3

When 2 businesses are in different stages integrate
Tesco buying Bookers wholesaler

Question 4

What is conglomerate intergration?

Answer 4

When a business buys a completed unrelated business
Amazon buying whole foods

Question 5

What are some advantages of horizontal integration?

Answer 5

Reduces competitors
Increases market share

Question 6

What are some disadvantages of horizontal integration?

Answer 6

Leadership and cultural clash
Reduces flexibility

Question 7

What are some advantages of vertical integration?

Answer 7

Cost savings
Quality control
Supply chain stability

Question 8

What are some disadvantages of integration?

Answer 8

Loss of focus
Reduces flexibility

Question 9

What are some advantages of conglomerate integration?

Answer 9

Opportunity for innovation
Better business reputation
Strategic exit solution

Question 10

What are some disadvantages of conglomerate integration?

Answer 10

Resistance from shareholders
Potential for bad performance

Question 11

What is organic growth?

Answer 11

Growth using the businesses resources

Question 12

What is inorganic growth?

Answer 12

Growth from help from external resources

Question 13

What are some methods to grow organically?

Answer 13

New product
New market
Franchising
Diversification

Question 14

What are some methods to grow inorganically?

Answer 14

Integration
Takeover
Merger

Question 15

What are some advantages of organic growth?

Answer 15

Less risky
Greater consistency
Can be steady
Less loss of control

Question 16

What are some disadvantages of organic growth?

Answer 16

Missed opportunities from acquisition
Potential for growth may be limited
Lack of shared expertise
Pressure on leaders

Question 17

What are the advantages of external growth?

Answer 17

Economies of scale
Reduced competition
Increased market share
Create barriers to entry

Question 18

What are some disadvantages of external growth?

Answer 18

Diseconomies of scales
May inherit problems
Brand dilution

Question 19

What is franchising?

Answer 19

A franchise is the replication of a successful business formula.

Question 20

What are some advantages of franchising?

Answer 20

Can be less risky
Will have support from franchisor

Question 21

What are some disadvantages of franchising?

Answer 21

Can lead to additional costs and loss of independence
Have less decision making

Question 22

What are the benefits for a franchisor?

Answer 22

Rapid expansion
Investment from others
Economies of scale

Question 23

What are the pitfalls for a franchisor?

Answer 23

Loss of control
Managing growth

Question 24

What are the benefits for a franchisee?

Answer 24

Lower risk
Established product
Experienced business
Brand awareness

Question 25

What is rationalism ?

Answer 25

Downsizing the scale of the business' operations (delayering, Closing firms, Wilkisons )

Question 26

Reasons for Rationalism ?

Answer 26

Improve efficiency Turn around poor performance Focus on core business Sell off less profitable parts of the business to have a better overall business Once a merger or takeover occurs to remove duplication of resources

Question 27

Factors affecting decisions about location/ relocation and rationalism ?

Answer 27

External EOS Costs(Land labour ) Availability of grants Target market (Local,national, International) Quantitative techniques Ethics Infrastructure legislation Politcal and environmental factors

Question 28

What is offshoring ?

Answer 28

Process off moving a business functions (Production and IT support) abroad

Question 29

What is Reshoring ?

Answer 29

Process off moving previously off shored functions back to the country of origin

Question 30

Main points off offshoring

Answer 30

Lower costs Higher productivity Enter new markers Overcome domestic regulations

Question 31

Main points off Reshoring

Answer 31

Cost savings no longer significant (China) QC problems Government incentives Shorter lead times

Question 32

What is Outsourcing

Answer 32

Practice of using services of an external organisation to carry out a business task Short term solution to capacity shortages Cost-effective

Question 33

Pros and cons of Outsourcing?

Answer 33

PROS Lower costs Increased capacity Greater flexibility Concentrate on core Employ specialists employees and resources CONS Potential loss of QC CUstomer dissatisfaction Loss of domestic jobs Damage to brand rep Impact on economy if outsourcing is to foreign firms(Employees going to China )