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Business A-level > Unit 9 > Flashcards

Unit 9 Flashcards

Strategic methods: how to pursue strategies (48 cards)

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1
Q

What is retrenchment?

A

A strategy used by a business to reduce its overall size and diversity of operations.

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2
Q

What is a takeover?

A

One business acquires control of the assets of another business either by a formal offer that is accepted (a friendly takeover) or by purchase of a controlling interest of shares (hostile takeover)

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3
Q

What are mergers?

A

When two or more businesses join together by mutual consent.

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4
Q

Reasons for growth

A

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

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5
Q

Why might a business pursue a strategy of retrenchment?

A

-changes in market
-failed takeover
-economic downturn

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6
Q

What does growth and retrenchment affect?

A

-marketing
-finance
-operations
-human resources

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7
Q

What is vertical integration?

A

-a business merges with or takes over another business in the same production chain but at a different stage

-this could be at an earlier stage (backward vertical integration) or at a later stage (forward vertical integration)

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8
Q

What is horizontal integration?

A

-a business merges with or takes over another in the same stage of the production chain

-it results in a larger presence and perhaps greater power in the market

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9
Q

What is conglomerate integration?

A

-a business merges with or takes over a firm in a totally unrelated business area

-also described as diversification

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10
Q

Reasons for takeovers and mergers failing

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 mergers and takeovers
-financial pressures

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11
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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12
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 and services.

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13
Q

Benefits of franchising

A

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

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14
Q

What is innovation?

A

The process of converting an invention into a good, service or process that creates value for a business.

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15
Q

What is product innovation?

A

The creation of new or improved products.

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16
Q

What is process innovation?

A

The development of new ways of making or providing a product or service.

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17
Q

What is the value of innovation?

A

-competitive advantage
-aligned strategic positioning
-stakeholder value

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18
Q

What is kaizen?

A

A Japanese business philosophy of continuous improvement in working practices and efficiency.

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19
Q

What does kaizen do?

A

-focus pass on making continuous small improvements that help keep a business at the top of its field
-involves everyone in the business from the top down and urges all to strive for improvement
-recognises there is always room for improvement and wants workers to be confident about offering suggestions
-relies on teamwork and quality circles and worker groups meet and work together to solve problems and come up with innovative changes

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20
Q

What is intrapreneurship?

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A

The act of behaving like an entrepreneur within an existing business organisation.

21
Q

What is benchmarking?

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A

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

22
Q

What is a patent?

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A

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

23
Q

What is a trademark?

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A

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

24
Q

What is copyright?

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A

The legal protection provided for the work of authors composers and artists.

25
Reasons for targeting, operating in and trading with international markets
-growth and profit -economies of scale -diversify risk -trade liberalisation -tax
26
What is e-commerce?
The buying and selling of goods and services through an electronic medium
27
What is transfer pricing?
The setting of the price for goods and services sold between related legal entities within an organisation.
28
Factors to consider when entering an international market?
-risk -competition -market potential -legal and political environment -economic factors -cost -culture -methods of entry
29
What is off-shoring?
The movement of the operations of a business to another country.
30
Methods of entering international markets
-exporting -licensing -alliances -direct investment
31
Benefits and drawback of licensing
-little investment required -possible tariffs and trade barriers
32
Benefits and drawbacks of licensing
-quick and low cost -avoid barriers -dependent on local producers
33
Benefits and drawbacks of alliances
-knowledge and expertise of local partner -means sharing knowledge and technology
34
Benefits and drawbacks of direct investment
-direct controls and avoids barriers -lower costs -high risk, with potential for management and control problems
35
Reasons for offshoring
-skills -new markets -a business-friendly framework -overcome trade barriers -natural resources
36
Problems with offshoring
-ethical issues: job losses in home country and may be moved to a place where production costs are cheaper -control and quality: difficulties in communication due to distance -IP theft -British reputation: made in Britain label has a reputation
37
What is re-shoring?
Businesses bring back to their home country operations which had been moved overseas
38
What is digital technology?
The use of digital resources to find, analyse, create communicate and use information effectively in a digital context.
39
Advantages of e-commerce for consumers and businesses
Consumers: -it allows access to more products and services at cheaper prices -information available instantly -it enables participations at auctions Business: -provides opportunities 24/7 and 365 days a year -offers global reach, potential cost reductions and supply chain improvements
40
Disadvantages of e-commerce for consumers
-they are unable to examine products personally -they are dependent on system reliability -their personal information can be stolen through hacking -they may not have access as not everyone is connected to the internet
41
What is big data?
Refers to the ever increasing amounts of structured, semi structured and unstructured data that can be mined for information
42
The four Vs of data mining
-volume: the almost inconceivable amount of data generated every second such as market research, business transactions and social media -velocity: the speed at which new data are generated and moved around -variety: the different types of data that can be used such as text, image, videos and voice messages -veracity: the messiness or trustworthiness of data, particularly those on social media
43
The use of technology
-create a better understanding of customers and purchasing habits allowing businesses to target customers more directly -business processes relating to stock levels, supply chains, and delivery routes can be optimised -big data can also be used to improve sport performance , national security and health
44
What is data mining?
The process used by organisations to turn large amounts of data into useful information.
45
What is enterprise resource planning?
The business management software system by which an organisation manages and integrates the importance parts of its business.
46
What happened before ERP?
-duplication -a lack of sharing data -inconsistency -isolated decisions -increased expenses
47
What happened after ERP?
-better analysis and planning capabilities -better management of resources -greater customer satisfaction -lower costs
48
Impact of digital technology
-financial monitoring and analysis are both quicker and easier to undertake -opened up new markets and enable more targeted promotions -greater automation of production and more efficient inventory control leading to lower costs, better quality and reduced waste -development of more flexible multi skilled workforces who work under better conditions and can be closely monitored

Business A-level (12 decks)

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