Theme 4 - Mrs Carr Flashcards
What is a joint venture?
commercial arrangement between two or more participants who agree to co-operate to achieve a particular objective
What is a merger?
When two businesses come together and will usually create a new business
What is an acquisition?
When one business buys another and takes control of it
What are reasons for businesses joining together?
Increase in finances
To increase the value of their business for shareholders to buy
Tax purposes
How would you achieve global competitiveness?
Having production of your business in other countries - this can decrease costs because other countries have things like cheaper minimum wage
What benefits do businesses gain from being globally competitive?
Higher market share
Increased profits
Lower costs
What is glocalisation?
Combination of the words globalisation and localisation
A business that has kept growing and growing
The business is distributed globally
What is meant by ethnocentric?
When a business doesn’t change anything about their product and just keeps everything the same
What is meant by polycentric?
A business tailoring their products to the local needs
What is meant by geocentric?
This is a mix of both ethnocentric and polycentric approaches
What is the Ansoff’s Matrix?
A strategic planning tool businesses can use to help their future growth
What 4 things are included in Ansoff’s Matrix?
Market development
Market penetration
Diversification
Product development
Why might a business change their marketing mix?
Changing trends
Demographics
The size and scale of the business changing
What is a niche market?
A small, specialised market for a particular product or service
the product or service will have a USP - unique selling point
Advantages of a Niche market?
Higher profits because businesses can charge higher prices for the product
Less competition
Brand loyalty
Disadvantages of a niche market?
Lack of economies of scale
May not get as many sales since the product and service is very specific
What is meant by ethics?
Ethics is about doing the right thing. Ethical behaviour requires firms to act in ways that stakeholders consider to be both fair and honest.
What are some advantages of behaving ethically?
Higher Revenue - demand from positive consumer support
Improved brand awareness and recognition
Better employee motivation and recruitment
New sources of finance - ethical investors
What are some disadvantages of behaving ethically?
Higher costs - sourcing from fair trade suppliers rather than lower cost suppliers
Higher overheads - training and communication of ethical policy
A danger of building up false expectations
What is corporate social responsibility (CSR)?
When a business aims to contribute to social goals
This may be done by them being more sustainable having lower emissions that contribute to global warming
They may engage in voluntary or ethically orientated practices
