Unit 9- strategic methods and how to pursue them

Question 1

What are strategic methods?

Answer 1

Different strategies a firm can use to try to achieve its objectives

Question 2

What are the 4 different strategic methods

Answer 2

Innovation, increasing the use of digital tech, internationalisation, changing the scale of the business

Question 3

What is organic growth?

Answer 3

Where a business expands on its own

Question 4

What is inorganic growth?

Answer 4

Involves linking up with other businesses

Question 5

What are 5 advantages of business growth?

Answer 5

Economies of scale
More sales and profits
Better known
Synergy (external only)
Market dominance

Question 6

What are 5 disadvantages of growth?

Answer 6

Diseconomies of scale
More public scrutiny
Management less in touch with customers and staff
Possible overborrowing
Overtrading

Question 7

What are the 4 types of external growth?

Answer 7

Merger
Takeover
Joint venture
Franchising

Question 8

What is a merger?

Answer 8

When 2 or more businesses come together to make 1 new businesses and all shareholders of old businesses become shareholders of new one

Question 9

What is a takeover?

Answer 9

When 1 business buys a controlling interest in another

Question 10

What is a joint venture?

Answer 10

Where 2 businesses work together on a project but are still totally separate

Question 11

What is franchising?

Answer 11

Where new business owners purchase the right to use another name and business model for free

Question 12

What is horizontal integration?

Answer 12

Integrating with a business that does exactly the same thing

Question 13

What is backwards vertical integration?

Answer 13

Joining up with a supplier

Question 14

What is forwards vertical integration?

Answer 14

Joining up with a firm that is a customer of you

Question 15

What is conglomerate integration?

Answer 15

Joining up with a completely different business

Question 16

What is retrenchment?

Answer 16

This is reducing the scale of a business

Question 17

What are economies of scope?

Answer 17

Cost savings from sharing costs between a range of products

Question 18

What is synergy?

Answer 18

The combined new business is better than the sum of the old two parts

Question 19

What is overtrading?

Answer 19

Cash flow issues caused by taking in too much new work

Question 20

What is the experience curve?

Answer 20

Cost savings from having been in an industry for some time

Question 21

What are the 3 types of economy of scale?

Answer 21

Purchasing economies, managerial economies and technical economies

Question 22

What are the 3 types of disceconomy of scale!

Answer 22

Coordination, communication, motivation

Question 23

How can you manage diseconomies scale?

Answer 23

Invest in tech
Training of managers
Reorganisation

Question 24

How can you manage more public scrutiny?

Answer 24

Careful scrutiny of supply chain

Publicise CSP/ethical behaviour

Question 25

What does Greiner's model of growth say?

Answer 25

Growth goes through several stages and at the end of each smooth stage of growth a firm will hit a crisis, against which the firm needs to do something before it can grow again

Question 26

What Is innovation?

Answer 26

The successful exploitation of new ideas

Question 27

What are the 2 types of innovation?

Answer 27

Product and process

Question 28

What are some pressures on a firm to innovate?

Answer 28

Reduce costs, be greener, meet changing consumer needs

Question 29

What're 6 ways of becoming and innovative organisation?

Answer 29

``` Kaizen groups Encourage intrapreneurship R and D Benchmarking Ensuring funding for new idea development No blame culture Promote callaborative working ```

Question 30

What are some advantages of innovation as a key strategy?

Answer 30

``` Gain a monopoly position Gain competitive advantage Create a USP Reduce costs Enter new markets Motivate staff ```

Question 31

What a Rep some disadvantages of innovation as a key strategy?

Answer 31

Costs No guaranteed payback CN be easier and cheaper to copy others Risk of IP theft

Question 32

What is internationalisation?

Answer 32

A strategy of operating in more than one country

Question 33

What are 4 methods of entering international markets?

Answer 33

Exporting, licensing, alliances/ventures, direct investment

Question 34

What did Bartlett and Ghosal devise?

Answer 34

A Matrix to help managers decide on the best approach for their situation

Question 35

What are are the 4 quarters of Bartless and Ghosalls Matrix?

Answer 35

Global approach, international approach, multi-domestic approach, transnational approach

Question 36

Where are the 4 different things on the grid?

Answer 36

Global - high integration low responsiveness International - low integration low responsiveness Multi-domestic - low integration high responsiveness Transnational - high integration high responsiveness

Question 37

WHat is offshoring?

Answer 37

Moving part of a firm's operations abroad

Question 38

What will it deoend on as to where to produce?

Answer 38

Cost Which markets being targeted Economic and political situation

Question 39

What is digital technology?

Answer 39

Electronic technology that uses computer chips

Question 40

What is e-commerce.

Answer 40

Buying and selling on the internet

Question 41

What is data mining?

Answer 41

Sifting through huge quantities of data to find patterns that can benefit the business

Question 42

What is big data?

Answer 42

This refers to the huge a,punts of data firms can now access

Question 43

What is an ERP system?

Answer 43

This is software that coordinates data from all of the business functions allowing managers to view it in real time and make better, faster decisions

Question 44

Why is digital technology increasingly used?

Answer 44

``` Improve efficiency Reduce costs Keep up with rivals Changing social trends Make better decisions ```