Unit 9- strategic methods and how to pursue them Flashcards Preview

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Flashcards in Unit 9- strategic methods and how to pursue them Deck (44):
1

What are strategic methods?

Different strategies a firm can use to try to achieve its objectives

2

What are the 4 different strategic methods

Innovation, increasing the use of digital tech, internationalisation, changing the scale of the business

3

What is organic growth?

Where a business expands on its own

4

What is inorganic growth?

Involves linking up with other businesses

5

What are 5 advantages of business growth?

Economies of scale
More sales and profits
Better known
Synergy (external only)
Market dominance

6

What are 5 disadvantages of growth?

Diseconomies of scale
More public scrutiny
Management less in touch with customers and staff
Possible overborrowing
Overtrading

7

What are the 4 types of external growth?

Merger
Takeover
Joint venture
Franchising

8

What is a merger?

When 2 or more businesses come together to make 1 new businesses and all shareholders of old businesses become shareholders of new one

9

What is a takeover?

When 1 business buys a controlling interest in another

10

What is a joint venture?

Where 2 businesses work together on a project but are still totally separate

11

What is franchising?

Where new business owners purchase the right to use another name and business model for free

12

What is horizontal integration?

Integrating with a business that does exactly the same thing

13

What is backwards vertical integration?

Joining up with a supplier

14

What is forwards vertical integration?

Joining up with a firm that is a customer of you

15

What is conglomerate integration?

Joining up with a completely different business

16

What is retrenchment?

This is reducing the scale of a business

17

What are economies of scope?

Cost savings from sharing costs between a range of products

18

What is synergy?

The combined new business is better than the sum of the old two parts

19

What is overtrading?

Cash flow issues caused by taking in too much new work

20

What is the experience curve?

Cost savings from having been in an industry for some time

21

What are the 3 types of economy of scale?

Purchasing economies, managerial economies and technical economies

22

What are the 3 types of disceconomy of scale!

Coordination, communication, motivation

23

How can you manage diseconomies scale?

Invest in tech
Training of managers
Reorganisation

24

How can you manage more public scrutiny?

Careful scrutiny of supply chain
Publicise CSP/ethical behaviour

25

What does Greiner's model of growth say?

Growth goes through several stages and at the end of each smooth stage of growth a firm will hit a crisis, against which the firm needs to do something before it can grow again

26

What Is innovation?

The successful exploitation of new ideas

27

What are the 2 types of innovation?

Product and process

28

What are some pressures on a firm to innovate?

Reduce costs, be greener, meet changing consumer needs

29

What're 6 ways of becoming and innovative organisation?

Kaizen groups
Encourage intrapreneurship
R and D
Benchmarking
Ensuring funding for new idea development
No blame culture
Promote callaborative working

30

What are some advantages of innovation as a key strategy?

Gain a monopoly position
Gain competitive advantage
Create a USP
Reduce costs
Enter new markets
Motivate staff

31

What a Rep some disadvantages of innovation as a key strategy?

Costs
No guaranteed payback
CN be easier and cheaper to copy others
Risk of IP theft

32

What is internationalisation?

A strategy of operating in more than one country

33

What are 4 methods of entering international markets?

Exporting, licensing, alliances/ventures, direct investment

34

What did Bartlett and Ghosal devise?

A Matrix to help managers decide on the best approach for their situation

35

What are are the 4 quarters of Bartless and Ghosalls Matrix?

Global approach, international approach, multi-domestic approach, transnational approach

36

Where are the 4 different things on the grid?

Global - high integration low responsiveness
International - low integration low responsiveness
Multi-domestic - low integration high responsiveness
Transnational - high integration high responsiveness

37

WHat is offshoring?

Moving part of a firm's operations abroad

38

What will it deoend on as to where to produce?

Cost
Which markets being targeted
Economic and political situation

39

What is digital technology?

Electronic technology that uses computer chips

40

What is e-commerce.

Buying and selling on the internet

41

What is data mining?

Sifting through huge quantities of data to find patterns that can benefit the business

42

What is big data?

This refers to the huge a,punts of data firms can now access

43

What is an ERP system?

This is software that coordinates data from all of the business functions allowing managers to view it in real time and make better, faster decisions

44

Why is digital technology increasingly used?

Improve efficiency
Reduce costs
Keep up with rivals
Changing social trends
Make better decisions