PAPER 1 IBBM Felipe

Expansion through mergers, acquisitions, or strategic partnerships.

External Growth

Operates in two or more countries with headquarters in the origin country.

MNC (Multinational Company)

An external group aiming to influence business or government actions ethically.

Pressure Group

Business commitment to ethics and social/environmental impact.

CSR (Corporate Social Responsibility).

Growth by expanding into new products and new markets.

Diversification

Company owned by shareholders with publicly traded shares.

PLC (Public Limited Company)

A group elected by shareholders to oversee and direct company strategy.

Board of Directors

Business expansion using internal resources (e.g. increasing output, opening new branches).

Internal Growth

When one company buys a controlling interest in another

Acquisition

The combination of promotional tools used to market a product.

Promotional Mix

the decrease in per unit production cost as output or activity increases

Economies of Scale

the increase in per unit production cost as output or activity increasess

Diseconomy of scale

Costs which do not change according to the amount of foods or services produced by the business

Fixed Costs

Costs which increase or decrease according to the amount of goods or services produced.

Variable costs

this occurs when a business grows by relying on its own resources and capabilities (investment in new products, or new sales channels , or more stores etc..) to increase sales.

Internal Growth

occurs when a business expands with the aid of resources and capabilities not developed internally by the company itself. obtains these new resources and capabilities by adquiring another company or forming some type of relationship, like a joint venture.

External Growth

occurs when two companies that are theoretically “equal” legally become one company

Merger

A new business entity formed by two or more companies sharing resources and risks

Joint Venture

when one company purchase a majority or all the shares of another company

Acquisition

when one company acquires a majority or all the shares in another company. the term is usually means that the company being acquired does not welcome the transaction.

takeover

An organization created owned and operated by two or more other organizations. Is legally distinct from the organizations that created it.

Joint Venture

Fixed Costs + Variable Costs

total Costs

Total Revenue – Total Costs

Profit

Price × Quantity Sold

Total Revenue

Total Costs ÷ Output

Average Costs

Fixed Costs ÷ Output

Average Fixed Costs

Variable Costs ÷ Output

Average Variable Costs

A company whose shares are traded on a public stock exchange and owned by shareholders. It must follow strict regulations and is accountable to the public.

publicly held company

Anyone affected by or interested in the business — such as employees, customers, suppliers, the community, and shareholders.

stakeholder

An individual or institution that owns shares in a company — essentially, a part-owner.

shareholder

one focus mainly on financial return, while while the other consider broader impacts like ethics, environment, and social responsibility.

difference between stakeholders and shareholders

Both are interested in the business’s success and can influence its decisions

stakeholders and shareholders have in common

It helps businesses analyze and plan strategies for growth by considering product and market combinations.

the Ansoff Matrix

A strategy to increase sales of existing products in existing markets (least risky).

Market Penetration in the Ansoff Matrix

A strategy to enter new markets with existing products.

What is Market Development in the Ansoff Matrix

A strategy to offer new products to existing customers.

What is Product Development in the Ansoff Matrix?

A strategy to offer new products in new markets (highest risk, highest potential reward).

What is Diversification in the Ansoff Matrix?

helps organizations identify internal strengths and weaknesses, and external opportunities and threats, to inform strategic decisions.

What is the theory behind SWOT Analysis?

Internal attributes that give the business a competitive advantage.

What are Strengths in SWOT?

Internal factors that put the business at a disadvantage.

What are Weaknesses in SWOT?

External conditions the business can exploit to its advantage.

What are Opportunities in SWOT?

External challenges that could harm business performance.

What are Threats in SWOT?

To assess external macro-environmental factors that impact a business’s strategic planning.

What is the purpose of PESTEL Analysis?

Examines the influence of government policies, trade laws, and stability on business.

What does Political mean in PESTEL?

Considers inflation, interest rates, GDP growth, and exchange rates.

What does Economic mean in PESTEL?

Looks at demographics, societal values, health trends, and lifestyle shifts.

What does Social mean in PESTEL?

Evaluates the impact of innovation, research, automation, and tech disruption.

What does Technological mean in PESTEL?

Assesses sustainability, resource scarcity, and climate regulations.

What does Environmental mean in PESTEL?

Reviews labor laws, consumer protection, safety regulations, and legal compliance.

What does Legal mean in PESTEL?