Unit 9 Definitions - Strategic Methods Flashcards

1
Q

alliance

A

occurs when two or more companies co-operate on an issue e.g apple and MasterCard, with MasterCard being the first credit card to offer apple pay

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2
Q

Bartlett and Ghoshal’s Model

A

a way of indicating the strategic options businesses wanting to manage their international operations based on two pressures: local responsiveness and global integration

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3
Q

the international strategy

A

producing domestically and exporting from the home country

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4
Q

the multi-domestic strategy

A

fitting products to each country in which a business operates. The product features are tailored to the local domestic environment, taking into account different food preferences, religious customs and other characteristics that define the locality

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5
Q

the transnational strategy

A

maximised local responsiveness but also gaining the benefits from global integration, characterised by an integrated and interdependent network of subsidiaries all over the world. These subsidiaries have a strategic role and act as centres of excellence

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6
Q

the global strategy

A

offering a standardised product worldwide, having. the foal to maximise efficiencies in order to reduce costs as much as possible. Global companies are highly centralised and subsidiaries are often vert dependent on the HQ

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7
Q

benchmarking

A

basing standards on the most efficient producers in the marketplace

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8
Q

big data

A

is a term for statistical sets that are so large or complex that traditional data processing applications are inadequate

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9
Q

conglomerate

A

a company that produces products in a number of different industries e.g Virgin Group or Unilever

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10
Q

conglomerate integration

A

two firms in an unrelated industry merge

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11
Q

copyright

A

legal protection against copying of writing, speeches, music and designs. It doesn’t have to be registered and anyone can put the copyright and date on the work they have created and it is copyrighted. To defend copyright it is necessary to take the infringer to court. It

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12
Q

what do copyrights encourage

A

creativity and they reward individuals for creativity

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13
Q

data mining

A

the analysis of large sets of data to find patterns and relationships between data e.g correlation and causations.

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14
Q

what is the benefit of data mining

A

it effectively helps businesses spot market trends ahead of rivals and understands consumers better

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15
Q

direct investment

A

taking controlling ownership in a company in one country by a company based in another country

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16
Q

diseconomies of scale

A

as a result of increasing output, average costs rise. Becoming a larger organisation may be less technically efficient due to communication, control or morale problems

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17
Q

e-commerce

A

buying and selling products and/or using electronic means (online shopping)

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18
Q

economies of scale

A

as a result of increasing the firm’s output, the average cost falls. In the long run, becoming larger may lead to technical, financial, commercial, managerial and risk-spreading economies

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19
Q

enterprise resource planning

A

is software that allows businesses to connect data from sales, logistics, distribution, marketing, manufacturing and inventory management

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20
Q

what is the benefit of enterprise resource planning

A

it can help make the business more efficient by matching sales and production more closely, potentially avoiding stockpiles of stock and allowing work schedules to be set according to likely demand a bit more precisely.

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21
Q

The experience curve

A

the reduction in average costs that occurs when increased total output allows producers to learn how to produce more efficiently. The larger the production the more experience one has in producing

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22
Q

what is the benefit of the experience curve

A

it means that market leaders have advantages over others

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23
Q

external growths

A

increasing sales and size of business as a result of merger or acquisition

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24
Q

franchising

A

the right to use the name, logos and trading method of another business for a fee

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25
Q

greiner’s growth model

A

attempts to predict the six phases and five crises that businesses may experience as they grow.

26
Q

what is the first phase of growth

A

creativity

27
Q

what is the first crisis

A

leadership

28
Q

what is the second phase of growth

29
Q

what is the second crisis?

30
Q

what is the third phase of growth?

A

delegation

31
Q

what is the third crisis?

32
Q

what is the fourth phase of growth?

A

coordination

33
Q

what is the fourth crisis?

A

the red tape crisis

34
Q

what is the fifth phase of growth

A

collaboration

35
Q

what is the fifth crisis?

36
Q

what is the sixth phase of growth

37
Q

horizontal integration

A

a merger of two firms, which operated at the same stage of production e.g ITV and friends reunited

38
Q

intellectual-property

A

an inventor’s idea protected by patent or copyright

39
Q

internationalisation

A

selling and/or operating in more than one country or that move to enter foreign markets and target new groups of consumers

40
Q

intrapreneurship

A

occurs when individuals within an organisation set are entrepreneurial by taking risks and generating new ideas

41
Q

licensing

A

selling the rights to produce to another company for a fee giving the other business the right to manufacture and perhaps sell the original firm’s product

42
Q

managerial economies of scale

A

reduction in average cost due to the specialisation of managerial roles, when organisations grow

43
Q

mergers

A

occur when two companies cease to be distinct and operate under a single board of directors. Shares in both previous companies tend to be eliminated and new shares for the new company are issued

44
Q

multinational

A

is a business that has operations in more than one country. Note that a business does not become an MNC simply because it sells its goods and services to more than one country. The key to being an MNC is that the business has business operations in two or more countries

45
Q

off-shoring

A

companies outsource business activities abroad mainly due to cheaper labour and facility costs

46
Q

on-shoring

A

transfer back to the country from which a business was originally located

47
Q

organic growth

A

business expansion through increasing output and sales rather than merger or acquisition e.g expansion by new product development

48
Q

overtrading

A

expanding beyond the level at which there is a safe level of cash. Growing tends to cause cash outflow for materials and wages before cash from revenue returns. There is a risk this will lead to liquidation despite strong sales

49
Q

patent

A

a legal right to be the sole user of new technology or invention. Patents are granted by the patent office and last for 20 years

50
Q

process innovation

A

a novel method of production has been initiated e.g nuclear fusion

51
Q

product innovation

A

launching an item never seen before

52
Q

purchasing economies of scale

A

average costs fall in larger-scale operations due to larger purchases attaining bulk buying discounts

53
Q

research and development

A

investigate activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures

54
Q

retrenchment

A

cutting back an organisation’s scale of operations

55
Q

sourcing

A

buying from another company. Where the materials come from

56
Q

synergy

A

when two companies together are stranger than the sum of individual parts. Illustrated by the equation 2+2=5. E.g economies of scale from a merger

57
Q

takeover

A

one firm buys more than 50% of the shares of another firm, probably against its will. It is likely to replace the acquired firm’s management e.g Tesco took over booker

58
Q

technical economies of scale

A

reductions in average cost due to the use of large scale machinery

59
Q

ventures

A

occurs when two or more businesses set up a business division or new company that will be operated jointly. e.g British Sugar (ABF) has a joint venture with Wuxuan sugar mill in China to produce 100m tonnes of sugar p.a.

60
Q

vertical integration

A

two firms operating at different production stages of the same industry combine to form one firm

61
Q

backwards vertical integration

A

involves joining with a firm at an earlier stage of the production process e.g a brewery buying a hop farm

62
Q

forward vertical integration

A

involves joining with a firm at a later stage of the production process e.g a brewery buying a pub