Strategic methods: how to pursue strategies

Organic growth

Expansion achieved through internal development, such as increasing sales, expanding product lines or entering new markets without acquisitions.

External growth

Expansion achieved through acquisitions, mergers or partnerships with other companies rather than through internal development.

Technical economies of scale

Cost advantages obtained by increasing the scale of production, leading to lower average costs per unit due to efficiencies in technology and processes.

Purchasing economies of scale

Cost advantages achieved through bulk purchasing of materials or supplies, allowing for lower unit costs due to volume discounts or reduced transaction costs.

Economies of scope

Cost savings resulting from producing a variety of products or services together more efficiently than producing them separately, often by sharing resources or infrastructure.

Diseconomies of scale

Increasing average costs per unit as production levels rise beyond a certain point, typically due to inefficiencies or complexities in managing larger operations.

Synergy

The combined value and performance of two businesses will be greater than the sum of the individual parts.

Overtrading

A situation where a company expands its operations too rapidly without adequate financial resources or operational capacity, leading to cash flow problems.

Retrenchment

A strategic response to financial difficulties or poor performance, involving reducing the scale or scope of operations to improve efficiency and profitability.

Merger

The combination of two or more companies into a single entity, typically with the aim of achieving synergies, expanding market share or increasing competitiveness.

Takeover

The acquisition of a controlling interest in a company by another company.

Venture

A business arrangement where two or more businesses agree to share their resources for mutual benefit

Franchising

A business model where individuals or groups (franchisees) are granted the right to operate under the brand and business model of a larger company (franchisor) in exchange for fees and royalties.

Vertical integration

The expansion of a company's operations into different stages of the supply chain, such as acquiring suppliers or distributors, to gain control over production or distribution processes.

Horizontal integration

The expansion of a company's operations into the same stage of the supply chain or industry, such as acquiring competitors, to increase market share or consolidate market power.

Conglomerate integration

The diversification strategy of expanding into unrelated industries or businesses to spread risk and capture new opportunities, often through mergers or acquisitions.

Kaizen

A Japanese business philosophy focused on continuous improvement in processes, products and services through incremental changes and employee involvement.

Research and development (R&D)

The systematic process of creating, testing and improving products, services or processes through scientific investigation and experimentation.

Entrepreneurship

The practice of fostering entrepreneurial behaviour and innovation within a business, encouraging employees to develop and implement new ideas or projects.

Benchmarking

Comparing a company's performance, processes or practices with those of competitors or industry leaders to identify areas for improvement and best practices.

Patent

Legal protection granted to inventors for their inventions, giving them exclusive rights to make, use or sell the invention for a limited period.

Copyright

Legal protection granted to creators of original works, such as literature, music or software, giving them exclusive rights to reproduce, distribute or perform the work for a limited period.

Globalisation

The process of increased interconnectedness and integration of economies, cultures and societies worldwide, facilitated by advances in technology, communication and trade.

Emerging economy

A developing country with rapidly growing industrialisation, infrastructure and economic potential, often characterised by high growth rates and increasing integration into the global economy.

Export

The sale of goods or services produced in one country to customers or markets in another country, contributing to international trade and economic growth.

Licensing

A business arrangement where one company (licensor) grants another company (licensee) the right to use its intellectual property, such as patents, trademarks or copyrights, in exchange for fees or royalties.

Alliances

Collaborative partnerships between companies to achieve common goals, such as sharing resources, technology or market access, while maintaining autonomy and independence.

Off-shoring

The relocation of business processes, operations or production to another country.

Re-shoring

The reverse of off-shoring, involving the return of business processes, operations or production to the original country.

Big data

Large volumes of structured and unstructured data collected from various sources, such as social media, sensors or transactions, used for analysis and decision-making.

Data mining

The process of discovering patterns, trends and insights from large datasets using statistical, mathematical or machine learning techniques.