Unit 9 Flashcards
Products of growth?
- Economies of scales
- Economies of scope
- Diseconomies of scale
- Experience curve
- Synergy
- Overtrading
Reasons for change?
- To meet objectives
- Respond to external forces
- Respond to internal forces
- Gain competitive advantage
What are the types of growth
- Organic
- External
What is Economies of scale?
As you get bigger it leads to an advantage of its current operations to fall in unit price.
- Technical
- Purchasing
- Managerial
What is economies of scope?
The advantage that a business gets as it increases its scale from being able to expand the range of activities.
What Diseconomies of scale?
The disadvantage suffered from an increase in scale which causes a rise in unit cost.
What is the experience curve?
The advantage enjoyed by a business by having managers and employees who know how to run the business.
What is the Pros from the experience curve?
- Greater specialism increasing efficiency.
- Confidence when dealing with stakeholders
- Less mistakes
What is synergy?
Two businesses joined together being able to achieve more than the sum of the two businesses operating separately.
What is overtrading?
When a business gets big too quickly.
What is the first stage and first crisis called?
Stage = Creativity
Crisis = Leadership
What is the second stage and second crisis called?
Stage = Direction
Crisis = Autonomy
What is the third stage and third crisis called?
Stage = Delegation
Crisis = Control
What is fourth stage and fourth crisis called?
Stage = Coordination
Crisis = Red tape
What the the fifth stage and fifth crisis?
Stage = Collaboration
Crisis = Future crisis
Benefits of being a franchiser?
- Rapid expansion
- Motivation - franchisee has their own capital in the business
- Economies of scale
Pitfalls of being a franchiser?
- Loss of control
- Managing growth
- Litigation
Benefits of franchisee
- Lower risk
- Established product
- Experienced business
- Brand awareness
- Proven operation
- Assistance
Pitfalls of franchisee?
- Lack of control
- Higher start up costs
What is product innovation?
Changing a product that already exists or developing an invention into a brand new product.
What is process innovation?
Changing a process of production that already exists or putting into practise a brand new process.
What is the pros of innovation?
- Creates a USP for the product
- Less competition due to patent
- More efficient and cost effective production process
- Likely to be premium product
What is the cons of innovation?
- Can be very costly in R & D stage and therefore a drain on resources
- For all innovations there is an opportunity cost
- Few innovations see the light of day.
Ways of becoming a innovative organsation?
- Kaizen
- R&D
- Intrapreneurship
- Bench-marking
Reasons for off shoring?
- Lower costs
- Higher productivity
- Enter new markets
- Overcome domestic regulations
- Talent pool
Reasons for re-shoring?
- Cost saving no longer significant
- Quality issues
- Infringement to intellectual property
- Shorter lead times
- Government incentives
In Bartlett and Ghoshal’s theory what is a business that has low local responsiveness pressure and high cost pressure?
Global
In Bartlett and Ghoshal’s theory what is a business that has high local responsiveness pressure and high cost pressure?
Transnational
In Bartlett and Ghoshal’s theory what is a business that has low local responsiveness pressure and low cost pressure?
International
In Bartlett and Ghoshal’s theory what is a business that has high local responsiveness pressure and low cost pressure?
Multi-domestic
What are the different uses of technology?
- E-commerce
- Big data
- Data mining
- Enterprise resource planning (ERP)
