IB Business HL Unit 2 Test

STEEPLE

social & cultural, techonological, economic, ethical, political, legal, enviornmental

SWOT Analysis

Strengths, weaknesses, opportunities, threats

GET CASH

growth, earnings, transference & inheritance, challenge, autonomy, security, hobbies

average costs of production, improvement in productive efficiency, helps businesses gain competitive cost advantage over smaller rivals  

economies of scale

economies of scale

advantages of large scale production that result in lower unit costs

diseconomies of scale

point at which businesses become too large

benefits of franchisor

parent company, flexibility for national or international presence. benefit from economies of scale

advantages of franchisee

low risk, lower start-up costs, best interest of franchisor, benefits from large scale advertising from parent company 

pitfalls for franchisor

difficult to control franchisee activities, high risk, may hurt company reputation

disadvantages to franchisees

expensive, significant % of revenues to franchisor, less flexibility

ansoff matrix

market penetration, product development, market development, diversification

market penetration

low risk growth strategy, existing products in existing markets

product developement

medium risk growth strategy, new products in existing markets

market development

medium risk growth strategy, existing products in new markets

diversification

high risk growth strategy, new products in new markets

boston matrix

stars, problem child, cash cow, dogs

stars

high market growth and high market share

cash cows

low market growth high market share

problem child

high market growth low market share

dogs

low market growth low market share

occurs when businesses acquire or merge with other businesses who engage in more or less the same activites

horizontal integration

occurs when businesses acquire other businesses involved in earlier or later stages in the chain of production

vertical integration

when a business purchases another business or enters into activities later in the chain of production 

forward vertical integration

when the business acquires or enters into activites earlier in the chain of production

backwards vertical integration

lower average costs of production as a firm operates on a larger scale due to an improvement in productive efficency

economies of scale

the result of higher unit costs as a firm continues to increase in size. the business becomes outsized & inefficent so average costs begin to rise

diseconomies of scale

2 firms agree to form a new company

mergers

when a company buys controlling interest in another firm (it buys enough shares in the target business to hold a majority stake

takeover/acquisition

when 2 or more businesses split the costs, risks, control & rewards of a business project. in doing so, the parities agree ot set up a new legal entity. 

joint venture

simillar to a joint venture in that 2 or more businesses cooperate in a business venture for mutual beenfit. the afiliated business remain independent organizations

strategic alliances

stage 1 of product life cycle & adoption

research & development

stage 2 product life cycle & adoption

introduction

stage 3 product life cycle & adoption

growth

stage 4 product life cycle & adoption

maturity

stage 5 product life cycle & adoption

decline