Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

alevel business > strategic methods > Flashcards

strategic methods Flashcards

(66 cards)

Start Studying
1
Q

types of growth

A

internal growth (organic) and external growth (integration)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what will growth achieve

A

economies of scale
economies of scope
experience curve
synergies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what problems may growth have when too fast

A

diseconomies of scale
overtrading
management crisis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what problems come with diseconomies of scale

A

coordination
communication
motivation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

impact of growth of finance

A

cash flow needs to be managed by forecasting
to stop
-overtrading
-too high gearing
-exchange rates if international

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

impact of growth on operations

A

economies of scale
diseconomies of scale
quality issues

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

impact of growth on marketing

A

may need to change marketing mic
more Distibution
more spent on marketing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

impact of growth on HR

A

more staff needed - pressure to recruit people
higher costs for wages- more ppl
recruitment costs
training costs
redeployment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

retrenchment

A

it is a strategic change all about reducing costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

how to achieve retrenchment

A

reduce output
reduce staff size - save on labour costs
reduce product portfolio- focus of a few
reduce countries operated in

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

why do you retrench

A

economic downturn
to leave unprofitable market
low ROCE
diseconomies of scale
focus on core competencies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

problems with retrenchment

A

may lose EOS gains, economies of scope, experience curve,
reduce employee motivation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

impact of retrenchment of finance

A

may help improve cash flow- less costs, more money
cost cutting- eg no more worry of exchange rates in international

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

impact of retrenchment of operations

A

EOS and diseconomies of scale depending on where you are according to MES (mini mum efficient scale)
decrease capacity so that cap utilisation increases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

impact of retrenchment of marketing

A

reduced product portfolio - less spending on marketing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

impact of retrenchment of HR

A

redundancy= less staff- delayering- flatter structure- wider spans of control
reduce staff- costs high in short term- but in long term for costs on wages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

purchasing Eos

A

as output increases costs decrease- purchase more supplies for less- you can negotiate with supplier cos you are more important to them

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

technical Eos

A

as business grows finance increases - able to buy more quantity and quality of capital (machinery)- increase productivity and efficiency - costs decrease

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

technical Eos example

A

movement from job production to flow production due to automated production line

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

managerial Eos

A

when a high level manager increase the output and costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

diseconomies of scale

A

when past the Eos mark and an increase in output leads to higher costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

effects of diseconomies of scale

A

discoordinated staff- too many
employee motivation drops, feel insignificant - production drops and waste increases so too costs
employee communication is lacking- being told what to do- reduction decreases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

economies of scope

A

when the variety of products makes av cost per unit decrease, because costs can be spread over more products and there are already all the processes in place

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

economies of scope results

A

can have increased brand loyalty- get everything form one place
more competitive - flexible with pricing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
experiance curve
more practice better efficiency then lower costs
26
experiance curve can lead to
being complacent and not innovative -resistant to change its an old theory
27
what is synergy
when the whole is greater than the sum of the parts - the advantage of a merger or takeover businesses come together -combined effect is better than separate
28
cost synergy
benefit of a merger- cost savings occur, purchasing eos
29
overtrading
when a business grows too quickly and uses up all of its working capital - liquidity issue a disadvantage and risk
30
how to prevent overtrading
cashflow forecast reduce receivables days expand payable days put long term funding in place lease rather than buy
31
greiner's model of growth
used to look at the stages of growth and management crises
32
phase 1 gmog
growth though creativity : focus around product and market - encourages innovation and creation - but communication becomes too informal so crisis of leadership occurs
33
how to prevent pahse 1 of gmog
create a management structure to regain direction and control
34
phase 2 of gmog
growth though direction defined department and roles but experienced managers want more power creates autonomy crisis
35
solution for phase 2 of gmog
delegation
36
phase 3 of gmog
growth though delegation managers begin to make decisions and will further delegate to others but this creates a communication gap owenes loose control crisis of control
37
solution for phase 4 of gmog
coordination
38
phase 5 of gmog
growth though coordination centralised and formal procedures procedures but this creates bureaucracy and the red tape crisis too much bureaucracy means reduced growth and innovation
39
solution for phase 5 of gmog
collaboration
40
phase 6 of gmog
growth though collaboration introduction of matrix structures in the biz (each team report to multiple leaders) but it can fail due to confusion crisis of internal growth
41
solution for gmog phase 6
external growth
42
phase 7 of gmog
external growth mergers or takeovers
43
criticism of gmog
just a model- each business grows differently not all stages re followed resistance to adapting the solution the longer your in one section
44
external growth
mergers takeovers quicker that internal more expensive
45
why do a merger or takeover
purchasing eos increase market share secure point of sale (if takenover a shop) secure supplier (if takenover a supplier) reduce risk diversification more knowledge
46
horizontal integration
same industry and stage of supply chain
47
forwards vertical integration
same industry but further up in the supply chain
48
backwards vertical integration
same industry but further down the supply chain
49
conglomerate integration
different industry and stage of production
50
joint venture
when 2 or more companies join together to invest in a high risk high reward business 50/50 split
51
pros of joint venture
skills and expertise from parent companies synergy risk is split losses are shared
52
cons of joint venture
profit is shared diff companies have diff cultures don't want to share competitive advantages with the other company invested
53
corperte venturing
venture capital - when one larger business takes an equity stake in a smaller business strategic alliance
54
franchisor
creator of a franchise who let franchisee to use the business formula for a price
55
franchisee
someone who pays the franchisor to use their idea - pays an initial fee and gives a cut of the profit
56
franchisor in change of
concept like menu uniform store layout
57
franchisee is in charge of
staff training recruitment stock control
58
external methods of growth
mergers takeovers ventures integration
59
product innovation
making new goods/services or improving existing
60
process innovation
new processes or delivery methods or improving existing ones
61
benefits of innovation
stay ahead of competition change high prices reputation economies of scope
62
disadvantage of innovation
costly time consuming wasting resources no guaranteed ROI risk
63
new product development process
idea analysis and screening development value analysis test marketing launch
64
how to protect ideas
patent - of a product or process trademark - logo, slogan , name copyright - writing and music
65
ERP
business management tool that connects all functions of the business
66
demerger
a company sells it assets and parts of the business

alevel business (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions