Unit 9

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Retrenchment
The cutting back of an organisation's scale of operations
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Organic growth
When a firm expands using its own resources
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External growth
Expansion through through integration with another firm as a result of either a merger or a takeover
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Integration
The coming together of two or more firms via a merger or takeover
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Merger
When two or more firms agree to come together under one board of directors
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Takeover
Where one firm buys a majority shareholding in another and therefore assumes full management control
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Technical economies of scale
The lower unit cost that arise because larger firms are able to use more efficient techniques of production
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Purchasing economies of scale
A reduction in unit costs as a result of buying in large quantities; these are sometimes called buying economies of scale
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Managerial economies of scale
Larger firms have greater scope to benefit from the specialisation of labour at supervisory and manager level in each of the functional areas of the firm
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Economies of scope
Cost advantages that result from firms providing a variety of products rather than specialising in the production or delivery of a single product
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The experience curve
Indicates that the higher the cumulative volume of production, the lower the direct cost per new unit produced
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Synergy
The whole is greater than the sum of the parts; 1+1=3
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Overtrading
Takes place when a business grows too quickly without organising sufficient long-term funds to support the expansion. Putting a strain on working capital.
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Greiner's model of growth
A model describing different phases of company growth, each of which includes a calm period of evolutionary development and growth that ends with a period of crisis and revolution
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Franchise
When a business gives another business the rights to supply its product or service.
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Vertical intergration
The coming together of firms in the same industry but at different stages of the production process; can be backwards or forwards
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Horizontal integration
The coming together of firms operating at the same stage of production and in the same market
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Conglomerate integration
The coming together of firms operating in unrelated firms
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Innovation
The successful exploitation of new ideas.
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Product innovation
The creation and launch of a good or service that is new or a significant change to an earlier good or service
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Process innovation
The creation of a new way of making, providing or delivering a particular good or service
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Kaizen
A policy of implementing small, incremental changes in order to achieve innovation, better quality and/or greater efficiency
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R&D
The scientific investigation necessary to discover new products or manufacturing processes, and the procedures necessary to ensure that these new products and processes are suited to the needs of the market
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Intrapreneurship
Acting like an entrepreneur within a large organisation
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Benchmarking
The process of setting competitive standards, based on the achievements of other firms, against which a firm will monitor its progress.
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Intellectual property
Any intangible assets that arise from human knowledge or ideas
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Patent
An official document granting the holder the right to be the only user or producer of a newly invented product or process for a specified period.
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Copyright
Legal protection against copying for authors, composers and artists
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Trademark
Signs, logos, symbols or words displayed on a company's products or on its advertising.
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Offshoring
Where companies outsource or subcontract business activities overseas, largely because labour and other production costs are cheaper.
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Re-shoring
The transfer of business operations back to the country of origin
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Export
Goods or services produced in one country are sold in another country
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Licensing
A business arrangement whereby one company gives another permission to manufacture its goods, offer its services, and use technology, brand or expertise for a specified fee or royalty
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Alliances
Agreements between two or more companies to combine their strengths and expertise in order to undertake a mutually beneficial project
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Direct investment
The taking of a controlling ownership in a company in one country by a company based in another country
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Multinational
A business that operates in several countries but is managed from one
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Bartlett and Ghoshal's international, transnational and global strategies
Four distinct types of multinational corporations
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International strategy
Taking products first produced for the domestic market and then selling them internationally with only minimal local customisation
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Multi domestic strategy
Focuses on increasing profitability by customising a firms products
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Global strategy
Focuses on increasing profitability by benefiting from cost reductions that come from economies of scale, experience curves and location economies
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Transitional strategy
Tries simultaneously to achieve lower costs through location economies, economies of scale and experience curve effects to differentiate products across international amrkets.
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Internationalisation
The growing tendency of companies to operate across national boundaries
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Enterprise resource planning
A businesses use of its information system so that it can automate and integrate its core business processes
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Other cards in this set

Card 2

Front

When a firm expands using its own resources

Back

Organic growth

Card 3

Front

Expansion through through integration with another firm as a result of either a merger or a takeover

Back

Preview of the back of card 3

Card 4

Front

The coming together of two or more firms via a merger or takeover

Back

Preview of the back of card 4

Card 5

Front

When two or more firms agree to come together under one board of directors

Back

Preview of the back of card 5
View more cards

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