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Business component 2 > Strategy and implementation strategy growth > Flashcards

Strategy and implementation strategy growth Flashcards

1
Q

What are some methods of growth?

A

Merger
Franchising
Takeovers

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2
Q

What is horizontal intergration?

A

When 2 businesses in the same stage integrate.
Facebook buying instagram

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3
Q

What is vertical integration?

A

When 2 businesses are in different stages integrate
Tesco buying Bookers wholesaler

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4
Q

What is conglomerate intergration?

A

When a business buys a completed unrelated business
Amazon buying whole foods

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5
Q

What are some advantages of horizontal integration?

A

Reduces competitors
Increases market share

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6
Q

What are some disadvantages of horizontal integration?

A

Leadership and cultural clash
Reduces flexibility

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7
Q

What are some advantages of vertical integration?

A

Cost savings
Quality control
Supply chain stability

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8
Q

What are some disadvantages of integration?

A

Loss of focus
Reduces flexibility

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9
Q

What are some advantages of conglomerate integration?

A

Opportunity for innovation
Better business reputation
Strategic exit solution

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10
Q

What are some disadvantages of conglomerate integration?

A

Resistance from shareholders
Potential for bad performance

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11
Q

What is organic growth?

A

Growth using the businesses resources

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12
Q

What is inorganic growth?

A

Growth from help from external resources

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13
Q

What are some methods to grow organically?

A

New product
New market
Franchising
Diversification

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14
Q

What are some methods to grow inorganically?

A

Integration
Takeover
Merger

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15
Q

What are some advantages of organic growth?

A

Less risky
Greater consistency
Can be steady
Less loss of control

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16
Q

What are some disadvantages of organic growth?

A

Missed opportunities from acquisition
Potential for growth may be limited
Lack of shared expertise
Pressure on leaders

17
Q

What are the advantages of external growth?

A

Economies of scale
Reduced competition
Increased market share
Create barriers to entry

18
Q

What are some disadvantages of external growth?

A

Diseconomies of scales
May inherit problems
Brand dilution

19
Q

What is franchising?

A

A franchise is the replication of a successful business formula.

20
Q

What are some advantages of franchising?

A

Can be less risky
Will have support from franchisor

21
Q

What are some disadvantages of franchising?

A

Can lead to additional costs and loss of independence
Have less decision making

22
Q

What are the benefits for a franchisor?

A

Rapid expansion
Investment from others
Economies of scale

23
Q

What are the pitfalls for a franchisor?

A

Loss of control
Managing growth

24
Q

What are the benefits for a franchisee?

A

Lower risk
Established product
Experienced business
Brand awareness

25
Q

What is rationalism ?

A

Downsizing the scale of the business’ operations (delayering, Closing firms, Wilkisons )

26
Q

Reasons for Rationalism ?

A

Improve efficiency

Turn around poor performance

Focus on core business

Sell off less profitable parts of the business to have a better overall business

Once a merger or takeover occurs to remove duplication of resources

27
Q

Factors affecting decisions about location/ relocation and rationalism ?

A

External EOS
Costs(Land labour )
Availability of grants
Target market (Local,national, International)
Quantitative techniques
Ethics
Infrastructure
legislation
Politcal and environmental factors

28
Q

What is offshoring ?

A

Process off moving a business functions (Production and IT support) abroad

29
Q

What is Reshoring ?

A

Process off moving previously off shored functions back to the country of origin

30
Q

Main points off offshoring

A

Lower costs
Higher productivity
Enter new markers
Overcome domestic regulations

31
Q

Main points off Reshoring

A

Cost savings no longer significant (China)
QC problems
Government incentives
Shorter lead times

32
Q

What is Outsourcing

A

Practice of using services of an external organisation to carry out a business task

Short term solution to capacity shortages
Cost-effective

33
Q

Pros and cons of Outsourcing?

A

PROS
Lower costs
Increased capacity
Greater flexibility
Concentrate on core
Employ specialists employees and resources

CONS
Potential loss of QC
CUstomer dissatisfaction
Loss of domestic jobs
Damage to brand rep
Impact on economy if outsourcing is to foreign firms(Employees going to China )

Business component 2 (15 decks)

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