Business environment and domestic and global expansion

Question 1

Internal environment

Answer 1

owners and managers, employees, organizational culture and organizational structure

Question 2

external environment

Answer 2

customers, competitors, suppliers, interest groups

Question 3

Characteristics of the maturity stage

Answer 3

top of industry
generally the longest stage of the BLC
Dominating presence in the market
may still experience growth but at a reduced rate 
fairly stable yearly profits

Question 4

Evaluation criteria

Answer 4

Stakeholder satisfaction
competativeness
effectiveness
effiency

Question 5

STEEPLE

Answer 5

Socio cultural 
technological 
ethical 
economic 
political 
legal 
environmental

Question 6

Horizontal growth

Answer 6

the replication or expansion of a business product service or model into new markets or industries.

i.e Expansion of an existing product to new customers

Question 7

Vertical growth

Answer 7

The adaptation of business products or services to increase revenue from existing markets.

i.e Adapts existing products to create new ones appealing to the target market

Question 8

Domestic expansion

Answer 8

the supply and demand for goods and services within a single country also known as the internal market.

• same laws, regulations, customs
• straightforward transactions
• low transaction cost
• cheaper processing handling and postage
• sales in one currency

Question 9

Global expansion

Answer 9

the buying or selling of goods in all countries of the world.

• greater globalization and growth due to ease of communication
• involves at least one other country beyond the businesses origin.
• informed and strategic decisions must be made about markets that are being expanded into.

Question 10

Emerging markets

Answer 10

A market that is building accountability and strength, opening to new foreign investments and trade and expected to provide greater returns despite higher risks.

• growing pop with disposable income with an interest in purchasing goods and services.
• Brazil, China, Columbia, India, Mexico
• Being the first to expand into an emerging market allows large market share to quickly be captured.
• challenges include diminished respect for IP (intellectual property) and hard to find reliable info.

Question 11

Expansion strategies

Answer 11

Developing a niche market - a small section of the market that has unique characteristics. Allows smaller businesses to compete with larger ones.

Innovation for expansion - Competitive environments in both global and domestic markets require businesses to apply innovative theories or strategies to all 4 key business functions. (HR, Finance, Marketing, Operations). Necessary to maintain a competitive advantage.

Research and development (R&D) - the process by which a business develops new technology or improves existing tech to improve operations.

Emerging technologies - A new technology with the potential to substantially alter the business and social environment. breakthrough technology likely to shape our lives, i.e VR.

Question 12

Modes of entry

Answer 12

Importing and exporting - self-explanatory, i.e manufacture goods in home country and export to another.

licensing - similar to franchising, a contractual agreement that allows a business to use the IP of another.

international agents and distributors - local partners in the new market act as an agent or distributor.

strategic alliances - a partnership between two businesses that benefit equally to gain access to a new area of expertise, technology or market.
joint ventures - a partnership between two businesses that pool resources and invest to create a third, jointly owned business.

overseas manufacturing:
outsourcing - strategic decision to transfer certain elements of businesses operations to external specialists. i.e legal work to law firms.
offshoring - the relocation of business activity to a new country.

sales subsidiary - a business owner and controlled by a larger company. a legal business entity distributes the goods and services of the parent company.

Question 13

Risk management

Answer 13

contingency plan

7 stages of RM

• establish context for the basis of RM process
• identify potential risks
• access possible severity and the possibility of occurrence
• analyse potential treatment options
• create RM plan
• implement
• review and improve