Unit 9

Question 1

What is organic growth?

Answer 1

Growth from within the business

Question 2

What are 2 examples of organic growth?

Answer 2

Sales increase, innovation

Question 3

What is external growth?

Answer 3

Growth from outside the business?

Question 4

What are 2 examples of external growth?

Answer 4

Mergers, takeover

Question 5

What is retrenchment?

Answer 5

Scaling back business activities

Question 6

What are some reasons for retrenchment?

Answer 6

DEOS, New leadership, economic downturn

Question 7

What are economies of scope?

Answer 7

More types of goods/services produced, the lower unit cost

Question 8

Draw the experience curve?

Answer 8

…

Question 9

What does the experience curve suggest?

Answer 9

The more experience a business has in producing something, the lower the unit cost

Question 10

What does the lower unit cost from the experience curve allow?

Answer 10

Cost advantage

Question 11

What is synergy?

Answer 11

Outcome is greater than the sum of the inputs

Question 12

What does synergy allow for?

Answer 12

Cost savings, higher sales

Question 13

What is overtrading?

Answer 13

When a business expands too quickly without having the required financial resources

Question 14

How can overtrading be spotted?

Answer 14

Low margins, high payables, high gearing

Question 15

What does Greiner’s Growth model do?

Answer 15

Predicts the six phases and five crises that businesses go through as they grow

Question 16

What are the 6 phases of the growth model? (in order)

Answer 16

Creativity, direction, delegation, coordination, collaboration, alliances

Question 17

What are the 5 crises of the growth model? (in order)

Answer 17

Leadership, autonomy, control, red tape, growth

Question 18

What are mergers?

Answer 18

When two firms integrate into one

Question 19

What are takeovers?

Answer 19

Acquiring control of another business

Question 20

What is franchising?

Answer 20

Granting a licence to another business to use their brand

Question 21

What are the 2 types of innovation?

Answer 21

Product, process

Question 22

What is kaizen?

Answer 22

Constantly introducing small incremental changes

Question 23

What is intrapreneurship?

Answer 23

When employees display entrepreneurial behaviour

Question 24

What is benchmarking?

Answer 24

Evaluating what another business is doing to replicate it in your own

Question 25

What are patents?

Answer 25

Legal right to produce a product for a certain time

Question 26

What are copyrights?

Answer 26

Automatically applied protection on creative work

Question 27

What is intellectual property?

Answer 27

Intangible creations of human intellect

Question 28

What are the 4 ways of entering international markets?

Answer 28

Exporting, licensing, alliances, direct investment

Question 29

What are alliances?

Answer 29

Forming a relationship with a business for a benefit in return

Question 30

What is e-commerce?

Answer 30

Buying and selling of goods on an electronic network

Question 31

What is big data?

Answer 31

Collecting large data sets from sources to identify trends

Question 32

What is data mining?

Answer 32

Analysing data and summarising it into useful information

Question 33

What is ERP?

Answer 33

Software that integrates and manages functional areas

Question 34

What does ERP allow?

Answer 34

Communication with suppliers, managing delivery, making payments, handling quality