1.5 Growth and evolution

Economies of Scale

Efficiencies gained when unit costs fall as the scale (volume) of production increases.

Diseconomies of Scale

Inefficiencies that occur when unit costs increase despite an increase in the scale of production.

Internal Growth

Growth that occurs within a company through utilizing its own resources.

External Growth

Growth that occurs through collaboration with outside organizations or individuals.

Franchise

A business model where a franchisor sells the rights to use its brand and sell its products to a franchisee.

Mergers

The integration of two or more businesses to form a single company by mutual agreement.

Acquisition

A process where one company takes control of another by purchasing a majority stake.

Market Penetration

A low-risk growth strategy focusing on increasing market share of existing products in existing markets.

Market Development

A strategy that involves selling existing products in new markets.

Product Development

A medium-risk strategy aimed at selling new products in existing markets.

Diversification

A high-risk growth strategy that involves marketing new products in new markets.

Vertical Integration

When a company expands its operations either back into the supply chain (backward integration) or forward towards the end consumer (forward integration).

Joint Venture

A business arrangement where two or more parties create a new entity for a specific purpose while remaining independent.

Strategic Alliance

A partnership where two or more companies cooperate on projects without forming a new entity.

Market Share

The percentage of an industry or market's total sales that is earned by a particular company.

Stakeholders

Individuals or groups who have an interest in the success and decisions of an organization.

Organizational Objectives

Specific goals that an organization sets to achieve its mission.

Globalization

The process of increased interconnectedness among countries and businesses worldwide.

Multinational Corporation (MNC)

A company that has operations in more than one country, often with a headquarters in one country.

Market Research

The systematic gathering, recording, and analysis of data about a market.

Consumer Behavior

The study of how individuals make decisions to spend their available resources.

Brand Loyalty

The tendency of consumers to continuously purchase one brand over others.

Target Market

A specific group of consumers at which a company aims its products and services.

SWOT Analysis

A framework for identifying and analyzing the Strengths, Weaknesses, Opportunities, and Threats of a business.

Positioning

The process of creating a distinct image of a product in the consumer's mind.

Value Proposition

A statement that outlines the unique value a product or service provides to customers.

Market Segmentation

The process of dividing a broader market into smaller, more defined groups.

Competitive Advantage

An advantage that a company has over its competitors, allowing it to generate greater sales.

Cost Leadership

A strategy focusing on becoming the lowest-cost producer in an industry.

Differentiation Strategy

A strategy where a company seeks to be unique in its industry.

Customer Relationship Management (CRM)

A strategy for managing a company's interactions with current and potential customers.

Sales Forecasting

The process of estimating future sales volumes.

Product Lifecycle

The stages a product goes through from conception to decline.

E-commerce

The buying and selling of goods or services through the internet.

Business Model

A company's plan for making a profit, detailing the products or services it will offer.

Value Chain

The series of steps a company takes to deliver a product or service to the market.

Customer Segmentation

The practice of dividing a customer base into groups of individuals.

Outsourcing

The business practice of hiring a party outside a company to perform services.

Corporate Social Responsibility (CSR)

A business model that helps a company be socially accountable.

Innovation

The process of implementing new ideas or improving processes.

Networking

The act of interacting with others to exchange information and develop professional or social contacts.

Supply Chain Management

The management of the flow of goods and services and includes all processes that transform raw materials.

Market Entry Strategy

A plan for how a company will enter a new market.

Public Relations (PR)

The practice of managing the spread of information between an organization and the public.

Pricing Strategy

The method businesses use to price their products or services.

Customer Service

The support offered to customers before, during, and after purchasing a product.

Product Differentiation

The process of distinguishing a product from others in the market.

Brand Equity

The value added to a product by having a well-known brand name.

Digital Marketing

The component of marketing that uses internet and online based digital technologies.

Social Media Marketing

The use of social media platforms to connect with audiences.

Affiliate Marketing

A marketing arrangement where an online retailer pays commission to an external website for traffic.

Referral Marketing

Encouraging existing customers to refer new customers to a business.

Market Dynamics

The forces that impact the supply and demand of products in a market.