Business Unit 3 Topic 1 IA1 Revision

What is the maturity stage of the business life cycle?

The fulfilment of current market, inability to grow further, or business has hit its peak.

Why do mature businesses expand?

To stay competitive, achieve long-term growth, increase profits, and grow their customer base.

List four motivations for expansion.

Larger customer base, profit growth, competitive edge, lower costs (economies of scale).

What is the purpose of strategic planning in maturity stage?

Ensures long-term viability and relevance of the business.

What tool is used for strategic planning growth strategies?

The Ansoff Matrix.

Name the four Ansoff Matrix strategies.

Market penetration, product development, market development, diversification.

Differentiate vertical and horizontal growth.

Vertical: Focus on existing customers/markets, increase market share, take over processes. Horizontal: Sell existing products/services to new customers in new locations (may involve acquisitions).

Name the five levels of business expansion.

Domestic, International, Multinational, Global, Transnational.

What is domestic expansion?

Growth within the country’s geographical limits

What is global expansion?

Business activities beyond home country borders, involving multiple countries.

How does GDP influence globalization decisions?

Affects interest rates businesses must pay.

Define emerging markets.

Economies with growing populations, disposable income, and untapped resources.

What advantages exist for first movers in emerging markets?

Large market share, access to customers/resources, brand building, high ROI.

List internal operating factors.

Owners/management, employees, organisational culture, organisational structure.

List external operating factors.

Customers, suppliers, competitors, intermediaries.

List external macro factors (STEEPLE).

Socio-cultural, technological, economic, ethical, political, legal, environmental.

Define culture, communication, etiquette, logistics in expansion.

Culture: Ideas, customs, social behaviours. Communication: Language barriers, message delivery. Etiquette: Polite behaviours expected in cultures. Logistics: Practicalities like location, time zones, supply chains.

What is a niche market?

A small, unique market segment with opportunistic characteristics.

How does innovation drive expansion?

By improving products, processes, marketing, or organisational methods for competitive advantage.

Define research and development (R&D).

Activities to develop new products/services, improve existing ones, or evolve processes.

How do emerging technologies impact expansion?

They disrupt industries, drive growth, facilitate diversification, and create niche markets.

What are modes of entry?

Planned strategies for delivering products into new markets.

Name three formats of market entry.

Movement of goods/services, contractual agreements, development of operations abroad.

Differentiate importing and exporting.

Exporting: Manufacture at home, sell abroad. Importing: Obtain goods/services from abroad for business activities.

What is licensing?

Contractual agreement allowing use of another business’s intellectual property.

Name four types of licenses.

Exclusive, sole, non-exclusive, open-source.

What is the role of international agents/distributors?

Local partners to navigate expansion, access grants/incentives.

Differentiate partnership, joint venture, and strategic alliance.

Partnership: Complementary skills, shared strengths. Joint Venture: New business formed by two+ companies. Strategic Alliance: Limited-scope partnership for expertise/technology.

What is overseas manufacturing?

Outsourcing/offshoring to reduce costs and focus on core advantages.

What are sales subsidiaries?

Businesses owned/controlled by larger companies to sell their products.

Define risk management.

Identifying, evaluating, and minimizing risks in business activities.

What is contingency planning?

Prepared plan of action to mitigate future events.

What does the PPRR model stand for?

Prevention, Preparedness, Response, Recovery.

What is operations concerned with?

Transforming inputs into outputs (production system).

What are the four stages of the employment cycle?

Acquisition, development, maintenance, separation.

Which stages are emphasized in maturity?

Development and maintenance.

What does development involve?

Formalizing processes, inducting staff, constant training.

What does maintenance involve?

Motivating/supporting employees, leadership, culture, retention.

Why is motivation important?

Improves retention, productivity, satisfaction, morale, reduces absenteeism.

List Maslow’s hierarchy of needs.

Physiological, safety, belongingness, esteem, self-actualisation.

What is Locke’s goal-setting theory?

Challenging but achievable goals motivate employees.

What are SMART goals?

Specific, Measurable, Achievable, Relevant, Time-bound.

What is Herzberg’s two-factor theory?

Satisfactory work environment is essential before motivation can occur.

What is Seligman’s PERMA framework?

Positive emotion, engagement, relationships, meaning, achievement.

What is an employer of choice?

A workplace people choose due to culture, flexibility, growth, wellbeing.

What is a diverse workforce?

Employees from varied backgrounds, inclusive environment.

What law promotes equal opportunity employment?

Anti-Discrimination Act 1991.

Define intrapreneurship.

Employees with entrepreneurial mindset introducing new ideas, creativity, leadership.

Name four intrapreneurship models.

Enabler, producer, opportunist, advocate.

What leadership styles exist?

Authoritative, charismatic, bureaucratic, authentic, transactional, transformational.

What is Fiedler’s contingency model?

Determines effective leadership style based on situation and group performance.

What is financial management?

Planning, organising, leading, controlling business funds.

What are financial controls in expansion?

Strategies to manage risks like exchange rates, transaction costs, hedging.

What is the triple bottom line?

People, planet, profit – measuring ethical/sustainable impact.

What is private equity?

Investment in private companies or buyout of public ones.

What are growth capital investments?

Private equity in mature companies seeking growth.

What is a capital market?

Place where securities are traded to grow investment and wealth.

What does going public mean?

Selling shares to new investors via IPO.

List IPO steps.

Appoint advisers → Prepare prospectus → Marketing → Lodge prospectus with ASIC → ASX review → Offer period → Shares allocated → Trading begins.

What are dividends?

Portion of profit paid to shareholders (cash, stock, property).

Why might some companies not offer dividends?

They reinvest profits into growth instead of paying shareholders.

What are government grants and incentives?

Financial support encouraging growth, not requiring repayment.

What is cost-benefit analysis?

Evaluates financial feasibility by weighing potential costs and benefits.

What are the 6 HR strategies?

Motivational theory, Leadership (Management), Employer of Choice, Diverse Workforce, Inclusive Workplace, Fostering Intrapreneurship.

Which stage of the BLC are we focusing on?

Maturity 

Which Analytical tool is needed for the exam?

SWOT

What are business facts?

Known truths about the business.

What are business characteristics?

Stage of the BLC, Size and Scale (small, medium, or large enterprise - measured by employees, revenue, or market reach), is it a sole trader? partnership? Private Company? Public? Cooperative? or Government owned? is it local, national, or global? which industry sector is it in? primary (raw materials), secondary (manufacturing), tertiary (services), or quaternary (knowledge/tech). Also its resources and capabilities such as financial strength, HR, tech, and intellectual property. what is the leadership style? is it innovation focused? what are the sustainability practices? what is the decision making approach

what is the business report extract structure?

4.0 SWOT

5.0 Trend

6.0 Relationship

7.0 Evaluate

8.0 Decision

9.0 Recommendation

Stage in the Business Life Cycle (BLC)

Start-up, growth, maturity, or decline — shows where the business is in its development.

Size and Scale

Small, medium, or large enterprise, measured by employees, revenue, or market reach.

Ownership Structure

Sole trader, partnership, private company, public company, cooperative, or government-owned.

Industry Sector

Primary (raw materials), secondary (manufacturing), tertiary (services), or quaternary (knowledge/tech).

Market Characteristics

Local, national, or global presence

Resources and Capabilities

Financial strength, human resources, technology, and intellectual property.

Organisational Culture & Values

Leadership style, decision-making approach, innovation focus, sustainability practices.

Legal & Regulatory Environment

Compliance requirements, licenses, and government policies affecting operations.

SWOT - Strengths

Internal advantages of the business — e.g., strong financial resources, skilled workforce, innovative products.

SWOT - Weaknesses

Internal limitations — e.g., lack of capital, poor leadership, outdated technology, limited market reach.

SWOT - Opportunities

External factors the business can leverage — e.g., emerging markets, new technology, changing consumer trends.

SWOT - Threats

External challenges that may harm the business — e.g., economic downturns, new competitors, regulatory changes.

Link to Business Characteristics

SWOT analysis is built on business characteristics (size, sector, culture, etc.).

4.0 SWOT

Analyse strengths, weaknesses, opportunities, and threats based on business characteristics.

5.0 Trend

Identify the general direction in which something is developing or changing over a period of time (minimum 3 years).

6.0 Relationship

Explain the connection between variables, such as a correlation (e.g., sales vs. marketing spend).

7.0 Evaluate

Assess alternatives using at least two criteria (e.g., feasibility, cost, risk, sustainability, effectiveness).

8.0 Decision

Select the most suitable alternative based on evaluation. Clearly state the chosen path forward.

9.0 Recommendation(s)

Provide actionable steps the business should take, justified by SWOT, trends, relationships, and evaluation.