Strategic methods: how to pursue strategies 3.9

Globalisation

Buying, selling, and producing from abroad.

Emerging economy's

BRIC and MINT, describes an economy in the process of rapid growth and industrialisation.
B - Brazil M - Mexico
R - Russia I - Indonesia
I - India N - Nigeria
C - China T - Turkey

Methods of entering international markets

Exporting
Licencing
Alliances
Direct investment

Big data

Collecting and analysing large data sets from sources to identify patterns.

Data mining

Summarise and analyse big data.

Retrenchment

Reduction of part of the business

Organic growth

Within the business.
Examples:
New product ranges
Opening new stores
Launching existing products into new markets
Franchising

Inorganic growth

Outside of the business.
Examples:
Takeover
Merger
Venture

Issues with growth

Economies of Scale
Economies of Scope
Diseconomies of Scale
The Experience Curve
Synergy
Overtrading

Diseconomies of Scale

When a business grows too large, leading to a possible increase in unit cost.
Examples are:
Poor communication
Lack of motivation
Loss of direction and co-ordination

Synergy

The power that results from the combination of two or more forces. (1+1=3)

Overtrading

Expanding a business rapidly without obtaining all of the necessary finance so that a cash-flow shortage develops.

Experience curve

Economies of scope

Unit costs are lower when a business produces a wider range of products rather than specialise in just one or a few products.

Integration

Forwards and vertical - acquire a business further up supply chain
Backwards and vertical - acquire a business earlier in supply chain
Horizontal - acquire a business at the same stage of the supply chain
Conglomerate - no clear connection to business buying it

Pressures for innovation

Product innovation - aiming to make the product better by adding something new and adding value to it.
Process innovation - aiming to make a process more effiecient.

The ways of becoming an innovative organisation

Kaizen
R&D
Intrepreneurship
Benchmarking

How to protect innovation and intellectual property

Patents, copyright, and trademark.
Patent - For product/idea.
Copyright - Creative work.
Trademark - Logos.