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biz! > Unit 9-strategic methods: how to pursue strategies > Flashcards

Unit 9-strategic methods: how to pursue strategies Flashcards

1
Q

what is retrenchment?

A

a strategy used by a business to reduce its overall size or diversity of operations

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2
Q

what are takeovers?

A

also known as acquisitions, is where one business acquires control of the assets of another business either by a formal offer that is accepted (friendly takeover) or by the purchase of a controlling interest of shares (hostile takeover)

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3
Q

what are mergers?

A

where two or more businesses join together by mutual consent

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4
Q

why is growth an important objective?

A

-increased profit
-survival
-reduces risk
-increase market share

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5
Q

why might a business pursue a strategy of retrenchment?

A

-changes in the market
-failed takeover
-economic downturn

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6
Q

what is organic/internal growth?

A

-selling more products or services
-targeting a wider or new market
-often financed by retained profit
-slower and less risky

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7
Q

what is external growth?

A

-achieved through take overs or mergers
-is groet by acquisition
-quicker but more risky

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8
Q

what are economies of scale?

A

the proportionate saving in costs as a result of an increase in the size of an operating unit

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9
Q

what are economies of scope?

A

the proportionate saving gained by producing two or more distinct products, when the cost of doing so is less that producing each separately

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10
Q

what are diseconomies of scale?

A

a situation where economies of scale no longer occur and unit costs begin to increase rather than decrease

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11
Q

why might diseconomies of scale occur?

A

-poor communication
-lack of control and coordination
-alienation of the workforce

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12
Q

what is the experience curve?

A

the idea that the more you do something, the better you get at it, enabling quicker and cheaper production

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13
Q

what is overtrading?

A

where a business grows too quickly, undertaking more business that its working capital can cope with

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14
Q

what is a synergy?

A

the idea that value and performance of two businesses combined will be greater than the sum of two parts

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15
Q

what is Greiner’s model of growth?

A

describes different phases of a business’s growth and provides a framework to understand different organisational structures and coordination methods

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16
Q

what are the different phases of Greiner’s model of growth and what are the corresponding crisis?

A

1: growth through creativity, leadership crisis
2: direction, autonomy crisis
3: delegation, control
4: coordination, red tape
5: collaboration, growth
6: alliances

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17
Q

what are some characteristics of retrenchment, their causes, problems and solutions?

A

-downsizing: caused by changes in the market, problem: alienation of the workforce, minimising workforce impact should solve it
-sale of assets: caused by economic downturn, problem: alienation of workforce, good communication should solve it.
-job losses: caused by a failed takeover, problem: alienation of workforce, collaboration with trade unions should solve it

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18
Q

how does growth and retrenchment affect the functional areas of a business?

A

-marketing: regarding changing marketing objectives in a growing or declining market and the impact on the marketing mix
-finance: impact decisions of growth in terms of both working cap and cap investment. might relate to financial stability in a declining market
-ops: in relation to unit costs, capacity and how to use technology
-HR: in relation to the organisational structure and responsibilities, the need for recruitment, selection and training and how to approach redundancies.

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19
Q

what are the different types of mergers and takeovers?

A

-vertical integration: forwards and backwards
-horizontal integration
-conglomerate integration

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20
Q

why might takeovers and mergers fail?

A

-an over-optimistic assessment of benefits
-a lack of detailed research
-resistance from employees
-clashes of culture
-a lack of experience and expertise in the case of conglomerate integration
-financial pressures, including paying too high a price

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21
Q

what is a joint venture?

A

a business arrangement where two or more businesses agree to pool their resources for the accomplishment of a specific task

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22
Q

what is franchising?

A

a method of growth where an existing business (the franchisor) grants another party (the franchisee) the right to use its trade name and sell its products or service

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23
Q

what benefits does franchising have on a franchisor?

A

-it is relatively quick
-finance is provided by the franchisee
-the franchisee is likely to be highly motivated
-the organisational structure is less complex

24
Q

what is innovation?

A

the process of converting an invention into a good, service or process that creates value for a business.
it is necessary for a business to conduct R&D

25
Q

what are the pressures for a business to become more innovative?

A

-survival
-shareholders and the city
-competitive environment
-social and ethical

26
Q

benefits of innovation for a business

A

-competitive advantage
-aligned to strategic position (differentiation or low cost strategy)
-stakeholder value increases

27
Q

what is keizen and what does it focus on?

A

the philosophy and practice of continuous improvement.
-making continuous small improvements that help a biz stay at the top of a field
-involves everyone in the biz and urges all to strive for improvement
-recognises there is always room for improvement and wants workers to be confident and offer suggestions
-relies on teamwork and quality circles, worker groups meet and work together to solve problems and come up with innovative changes

28
Q

what is intrapreneurship?

A

the practice of entrepreneurship that exists within an established business. it’s the act of behaving like an entrepreneur

29
Q

what is benchmarking?

A

a strategic and analytical process of continuously measuring an organisation’s products, services and practices against a recognised leader

30
Q

what is a patent?

A

a government license that gives the holder the rights to a process, design or new invention

31
Q

what is a trademark?

A

a recognisable name, logo, slogan or design that denotes a specific product or service and legally differentiates it from others

32
Q

what is copyright?

A

the legal protection provided for the work of authors, composers and artists

33
Q

how does innovation impact the different functional areas?

A

-finance: needs funding with no guarantee of a return
-marketing: may stem from or need market research to ascertain customer reactions, promotion
-ops: process innovation directly affects ops, new products may require new processes, capacity
-HR: fully engaged talented workforce

34
Q

what are the reasons for targeting, operating in and trading with international market

A

-growth and profit
-economies of scale
-diversify risk
-trade liberalisation
-tax

35
Q

what is transfer pricing?

A

the setting of the price for goods and services sold between related legal entities within an organisation

36
Q

what are some factors influencing the attractiveness of international markets?

A

-risk levels
-competition
-market potential
-legal and political environment
-economic factors
-culture
-methods of entry

37
Q

what is off shoring?

A

the movement of the operations of a business to another country

38
Q

what are the 4 main methods of entering international markets?

A

-exporting
-licensing
-alliances
-direct investment

39
Q

what are the positives and negatives of exporting?

A

P: little investment needed
N: possible tariffs and trade barriers

40
Q

what are the positives and negatives of licensing?

A

P: quick ad low cost, avoids barriers
N: dependent on local producers

41
Q

what are the positives and negatives of alliances?

A

P: knowledge and expertise of local partner
N: means sharing knowledge and technology

42
Q

what are the positives and negatives of direct investment?

A

P: direct costs and avoids barriers, lower costs
N: high risk, with potential for management and control problems

43
Q

what factors influence a business to buying, selling and producing abroad?

A

-skills
-new markets
-a business friendly framework
-overcoming trade barriers
-quality
-cost

44
Q

what might make businesses hold back from off-shoring?

A

-ethical issues
-control and quality
-IP theft
-british reputation

45
Q

what is barlett and goshal’s international strategies model?

A

it identifies 4 international strategies according to the pressure for local responsiveness (high or low) and the pressure for integration (high or low)

46
Q

what is the impact of internalisation on the 4 funcional areas of the business?

A

-marketing: researching the market and developing appropriate promotional strategies
-finance: will need financing, increasing competitiveness might lead to pressure for cost reduction
-ops: sourcing materials, adapting products, quality and capacity , pressure to reduce unit costs
-HR: recruitment and training, redundancy strategies may be needed, consideration of management styles when working with different cultures

47
Q

what is digital technology?

A

describes the use of digital resources to find, analyse, create, communicate and use information effectively in digital context

48
Q

what pressures might there be to adopt digital technology?

A

-improving performance
-keeping up with consumer and market trends

49
Q

adv of e-commerce for consumers and for a business

A

consumers:
-it allows access to more products and services at cheaper prices
-info is available instantly
-it enables participation at auctions
-more convenient
business:
-provides opportunities 24/7 and 365 days a year
-offers a global reach, potential cost reductions and supply chain improvements

50
Q

disadv of e-commerce for consumers

A

-they are unable to examine products personally
-dependent on system reliability
-personal info can be stolen through hacking
-they may not have access, as even today some people are not connected to the internet

51
Q

what is big data?

A

the ever-increasing amounts of structured, semi-structured and unstructured data that have the potential to be mined for info

52
Q

what is data mining?

A

the process used by organisations to turn large amounts of data (big data) into useful information

53
Q

what is enterprise resource planning (ERP)?

A

the business management software system by which an organisation manages and integrates the important parts of its business

54
Q

what advantages does ERP bring to a business?

A

-better analysis
-better management of resources
-greater customer satisfaction
-lower costs

55
Q

what impact does digital technology have on the functional areas of the business?

A

-finance: quick an easy to undertake
-marketing: digital tech have opened up new markets, enabled more targeted promotions and reduced marketing costs, e-commerce and social media
-ops: digital tech has enabled greater automation of production an more efficient inventory control, lower costs, better quality, greater flexibility and reduced work
-HR: digital tech has enabled the development of more flexible, multi-skilled workforces.

biz! (10 decks)

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