Theme 3

Question 1

Name the four stages of ansoff matrix

Answer 1

Market penetration, product development, market development, diversification

Question 2

What is market penetration?

Answer 2

Existing product in Existing market

Question 3

What is product development?

Answer 3

New products in existing market

Question 4

What is market development?

Answer 4

New market with existing product

Question 5

What is diversification?

Answer 5

New market and new product

Question 6

How can a business use market penetration?

Answer 6

Low price
Use promotion

Question 7

What is a drawback of market penetration?

Answer 7

Limit growth and low eos

Question 8

What is the benefit of product development?

Answer 8

Increase loyalty and become price inelastic

Question 9

What is the drawback of product development?

Answer 9

High R+D costs

Question 10

What is the advantage if market development?

Answer 10

Spread risk
Purchasing eos

Question 11

What is the disadvantage if market development?

Answer 11

Market research to find best country and understand their needs

Question 12

What is the benefit of diversification?

Answer 12

New opportunities which can lead to high levels of growth and eos

Question 13

What is the disadvantage of diversification?

Answer 13

R+D and market research costs

Question 14

What does swot stand for?

Answer 14

Strengths, weaknesses, opportunities, threats

Question 15

What is the structure for swot analysis?

Answer 15

Para 1- pick one of swot and do line of analysis
Para 2- pick another swot and say why might be bad
Conclusion say disadvantage could be advantage

Question 16

What are porters five forces?

Answer 16

Threat of new entrants
Threat of substitutes
Rivalry among competitors
Bargaining power of suppliers
Bargaining power of buyers

Question 17

What is threat of new entrants?

Answer 17

How high barriers of entry in the market are. If high low competition.

Question 18

What is the impact of threat of substitutes?

Answer 18

If high more competition and more price elastic

Question 19

How can suppliers have a higher Bargaining power

Answer 19

When there is less in market

Question 20

What is Bargaining power of buyers?

Answer 20

More choice negotiate lower prices

Question 21

What is external economies of scale?

Answer 21

Reduction in costs in industry businesses can use. Caused by labour or outsourcing

Question 22

How can Labour lead to external eos?

Answer 22

Industry grows so more workers attracted. More people go to education e.g. uni courses for job. More skills in Industry More skilled workers. More productive spread fixed costs over more units

Question 23

How can suppliers lead to external eos?

Answer 23

More suppliers
More choice of suppliers
More buyer power
Negotiate lower prices
Lower cost of sales
Lower sp
Increase demand
Spread fc over more units

Question 24

What are problems with growing

Answer 24

Diseconomies of scale
Overtrading

Question 25

How can internal diseconomies of scale occur?

Answer 25

Employee productivity low Multiple suppliers can negotiate purchasing eos

Question 26

What causes external diseconomies of scale?

Answer 26

Overcrowding Firms compete for resources increasing costs

Question 27

What is overtrading?

Answer 27

Grows too quickly so run out of cash. Low liquidity

Question 28

What is organic growth?

Answer 28

Growing from within the business

Question 29

What are external economies of scale?

Answer 29

Mergers, takeovers, and joint venture

Question 30

What is a takeover?

Answer 30

One business buying a majority share in another

Question 31

What is a merger?

Answer 31

Two businesses join together to dilute shares

Question 32

What is a joint venture?

Answer 32

Two businesses work together on a project

Question 33

What is the benefit of decision trees?

Answer 33

Find option that will return the highest profit. Reinvest into expansion and achieve eos

Question 34

What is the drawback of decision trees?

Answer 34

Don't account pestle factors so may have less profits

Question 35

What are the two business decision methods?

Answer 35

Subjective and evidence based

Question 36

What is an advantage of subjective decision making?

Answer 36

Quick decision making

Question 37

What is transformational leadership?

Answer 37

When there's a change in leadership

Question 38

What is a benefit of transformational leadership?

Answer 38

New ideas into business

Question 39

What is a drawback of transformational leadership?

Answer 39

Not match business culture/ culture class so lower productivity

Question 40

What is scenario planning?

Answer 40

Plan for impact of potential threats

Question 41

How do you set out a scenario planning question?

Answer 41

Identify threat Identify how business reduces impact Say how planning lowered impact on reputation Impact of strong reputation

Question 42

What is business continuity?

Answer 42

How to restore business back to normal after a setback

Question 43

What is succession planning?

Answer 43

Thinking of person to replace leader after leader leaves