Studied by 0 peopleAcquisition
One company buying a controlling interest in another, approved by the target company's board.
Average cost
Cost per unit of output.
Backward vertical intergration
Business amalgamates with another firm at an earlier stage of production
Conglomerates
Businesses with diverse products across different industries.
Demerger
Company sells part of its business, splitting into two or more.
Diseconomies of scale
Cost disadvantages as a firm grows, (e.g. average costs rise)
Economies of scale
Advantages of company growth leading to lower average costs with larger production.
External diseconomies of scale
Industry growth raises average costs.
External economies of scale
Average cost falls as industry grows, benefiting all firms.
External growth
Business grows by collaborating, merging, or buying other organizations.
Financial economies of scale
Large firms save on interest due to lower risk.
Forward vertical integration
Firm amalgamates with another firm operating at a later stage of production.
Franchising
Franchisor sells rights for others to sell products under its name for a royalty fee.
Horizontal integration
Business amalgamates with another firm operating at the same stage of production
Internal diseconomies of scale
Internal issues raise average costs as a firm grows.
Internal economies of scale
Cost advantages within a growing organization (e.g. materials in bulk)
Internal growth
A business grows using its own capabilities and resources to
increase the scale of its operations and sales revenue.
Joint venture
Two or more organisations creating a separate legal enterprise to achieve a goal
Lateral integration
Firms with similar operations but non-competing merge.
Marketing economies of scale
Larger firms afford specialist managers for efficiency.
Merger
A form of external growth where two or more firms form a new organization.
Optimal level of output
Most efficient scale where average cost is minimized.
Purchaser
Acquiring company in an acquisition or takeover.
Purchasing economies of scale
Large organizations save on bulk purchases.
Risk bearing economies of scale
Larger firms can handle greater risks.
Specialisation economies of scale
Larger firms hire specialists for increase productivity.
Strategic alliances
Organisations join for external growth without forming a new entity.
Synergy
Combined operations create greater output and efficiency.
Takeover
Company buys controlling interest without target's approval.
Target company
Purchased organisation in an acquisition or takeover.
Technical economies of scale
Cost savings from large-scale processes and machinery.
Vertical integration
Integration between businesses at different production stages.
Market share
Firm's sales revenue as a percentage of the total market's sales revenue.
Market size
Total number of customers or sales revenue in a market, indicating potential buyers.
Calculation of market share
Market share % = firms sales divide by total sales in market x 100
Corporate social responsibility (CSR)
Businesses consider ethical and environmental impact.
Ethical code of practice
Documented beliefs guiding acceptable behavior.
Ethical objectives
Organisational goals based on moral guidelines.
Ethics
Moral principles guiding decision-making
Mission statement
Organisation’s purpose declaration
Objectives
Goals including growth, profit maximisation and ethics
Strategic objectives
the longer-term goals of a business, such as profit maximization, growth, market standing and increased market share.
Strategies
The methods to achieve long-term goals,
Tactics
The methods used to achieve goals.
Tactical objectives
short-term goals that affect a unit of the organization. They are specific goals that guide the daily functioning of certain departments or operations.
Vision statement
Long-term aspirations of the organisation
Microfinance providers
Offer the opportunity to receive funding
Linear production
Taking resources from the earth and disposing them.
Circular production
aims to minimise waste and maximise resource efficiency by closing the loop through recycling.
Labour unions
organisation of workers formed to protect the rights and advance the interests of its members concerning wages, benefits, and working conditions.
Suppliers
Are external stakeholders who provide goods and services to organisations
Ways to stop conflict
increase transparency through managers and employees, and tie compensation to long term company performance
First mover advantage
an advantage gained by a company that first introduces a product or service to the market.
Deindustrialisation
when a country or region sees a decrease in its manufacturing activity.
Market development
When a company tries to sell its existing products or services in new markets or to new customer groups.
5 parts of business cycle
Peak, recession, trough, expansion
The x and y axis of business cycle
GDP, Time
Diseconomies of scale graph x and y
Average cost, Output
SMART objectives
Specific, measureable, achievable, relevant and time specific
Conflict
Disputes among stakeholders leading to tension
Customers
Business clients seeking value for money
Directors
Senior executives elected by shareholders.
Shareholder
a person, company, or institution that owns at least one share of a company's stock or in a mutual fund
Employees
Staff with an interest in the organisation
External stakeholders
Individuals and organisations with a direct interest in business activities.
Finaciers
Those who provide financial advice to a company
Government
Ruling authority ensuring business compliance with laws.
Internal stakeholders
Members within the organization including employees, managers, directors, and shareholders.
Local community
Public and businesses interested in organization activities, job creation, and social responsibility.
Managers
Internal stakeholders overseeing daily operations.
Pressure groups
Individuals with common concerns seeking to influence organization behavior.
Gross domestic product (GDP)
Value of a country’s annual output or income
Host country
Nation allowing multinational companies to set up within its borders.
Multinational company (MNC)
Organization operating in multiple countries, often with headquarters in its home country.
Protectionist policies
Measures to reduce competitiveness of imports, like tariffs, quotas, and trade restrictions.
Calculation of GDP
Consumer spending + Investments business + Government spending + (Exports - Imports)
Fiscal policy
Government spending and taxation
Expansionary fiscal policy
Increasing one of the GDP=C+I+G+(X-M).
Contractionary fiscal policy
Decreasing one of the GDP=C+I+G+(X-M).
Monetary policy
The actions taken by a country's central bank to manage its money supply and interest rates in order to influence economic conditions like inflation and growth.
Calculation of sales and revenue
revenue = total sales x price
Calculation of net profit
revenue - cost of production
Calculation of gross profit
revenue - cost of production - tax
Consumers
The people or organizations that actually use a product.
Customers
The people or organizations that buy the product.
Deed of partnership
the legal contract signed by the owners of a partnership.
Incorporation
There is a legal difference between the owners of a company and the business itself
Initial public offering (IPO)
When a business sells all or part of its business to shareholders on a public stock
exchange for the first time.
Social enterprises
Revenue-generating businesses with social objectives at the core of their operations.
1st D of DEADER
Definition
1st E of DEADER
Examples
A of DEADER
Advantages
2nd D of DEADER
Disadvantages
2nd E of DEADER
Evaluation
R of DEADER
Recommendations
Market penetration (Ansof tool)
selling existing products to existing markets.
Market development (Ansof tool)
selling existing products to new markets
Product development (Ansof tool)
selling new products to existing markets
Diversification
selling new products to new markets
Note
Flashcard