Business IA1 Exam Revision

What does the Maturity Stage of the business life cycle refer to?

The fulfilment of its current market, inability to grow, or hitting its peak.

Why do mature businesses seek expansion?

To stay competitive and achieve long-term growth.

What are the motivations for business expansion?

Larger customer base, profit growth, competitive edge, and lower costs.

What does the Ansoff matrix help with?

Strategic planning via four growth strategies: Market Penetration, Product Development, Market Development, and Diversification.

What is vertical growth in business expansion?

A strategy focusing on existing customers and markets to increase market share.

What is horizontal growth?

Selling existing products to new customers in new locations, possibly with slight alterations.

What are the five levels of business expansion?

Domestic, International, Multinational, Global, and Transnational.

What is the benefit of domestic expansion?

Allows businesses to operate in familiar environments, reducing risks.

What defines global markets?

Business activities that occur beyond the home country's borders and require more than one country.

What is an emerging market?

An economy that is not as efficient as advanced markets but has a growing population with disposable income.

What are internal operating factors affecting business expansion?

Owners/Management, Employees, Organisational Culture, and Organisational Structure.

What are external operating factors?

Customers, Suppliers, Competitors, and Intermediaries.

What does STEEPLE stand for?

Socio-Cultural, Technological, Economic, Ethical, Political, Legal, and Environmental factors.

What is the role of innovation in business expansion?

Innovating products, processes, marketing, or organizational methods allows for competitive advantage.

What is the purpose of research and development in business?

To develop new services or products, improve existing ones, or evolve processes.

What are the modes of entry into new markets?

Movement of goods/services, contractual agreements, and development of strategies in other countries.

What is exporting?

Manufacturing products in the home country and selling them to another country.

What is importing?

Obtaining goods/services from an external country for business activities.

What is a licensing agreement?

A contract allowing a business to use another's intellectual property.

What is a joint venture?

An agreement between two or more companies to form a new business.

What is risk management in business?

The process of identifying, evaluating, and understanding risks to minimize their impact.

What is the significance of Gross Domestic Product (GDP) in globalization?

It affects the interest rates businesses must pay, influencing globalization decisions.

What is the purpose of strategic alliances?

To gain new expertise or access to new technology with limited scope and function.

What are exclusive licenses?

Commercialization of intellectual property to sell to new markets, excluding all others.

What is the role of international agents and distributors?

Local partners that help businesses navigate expansion into new markets.

What is the impact of emerging technologies on business?

They can disrupt industries, drive growth, and create niche markets.

What is a sales subsidiary?

A business owned and controlled by a larger company that sells its products.

What is contingency planning?

A prepared plan of action to mitigate future events or circumstances that can have a significant impact.

What does the PPRR model stand for?

Prevention, Preparedness, Response, and Recovery.

What is the role of operations in a business?

Operations is concerned with transforming inputs into outputs, producing goods or services that consumers want.

What are the four stages of the employment cycle?

Acquisition, Development, Maintenance, and Separation.

What is the focus during the development phase of the employment cycle?

Building business culture and inducting staff.

What is the primary focus of the maintenance stage in HR?

Motivating and supporting employees to help the business achieve its goals.

What is the significance of motivation theories in HR?

They help leaders tailor strategies to support diverse employee personalities, improving retention and productivity.

What are Maslow's Hierarchy of Needs?

Physiological needs, safety needs, belongingness/social needs, esteem needs, and self-actualization.

What does Locke's goal-setting theory emphasize?

Identifying challenging but achievable goals to motivate employees.

What is Herzberg's two-factor theory?

It states that a satisfactory work environment is essential before any positive motivation can prevail.

What is Seligman's PERMA framework?

A holistic approach to motivation focusing on Positive Emotion, Engagement, Relationships, Meaning, and Achievement.

What defines an 'Employer of Choice'?

A desirable place to work due to strategies that create a collaborative culture and support employee wellbeing.

What is a diverse workforce?

Employees from a wide range of backgrounds, characteristics, and experiences.

What is intrapreneurship?

Fostering the skills of employees with an entrepreneurial mindset to benefit the business.

What are the four models of intrapreneurship?

The enabler, the producer, the opportunist, and the advocate.

What is Fielder's contingency model?

It determines what type of leader will be effective in certain situations and how this affects group performance.

What does financial management cover?

Planning, organizing, leading, and controlling business activity and funds.

What are financial controls in expansion?

Strategies and processes a business adopts to manage finance and associated risks during growth.

What is the triple bottom line?

A framework expressing a company's impact on people, planet, and profit.

What is an Initial Public Offering (IPO)?

The process of selling shares that were previously privately held to new investors for the first time.

What are dividends?

A portion of the profit generated by a company paid to shareholders.

What are government grants and incentives?

Funds designed to encourage growth that do not require repayment.

What is cost-benefit analysis?

An approach to evaluate the financial feasibility of a strategy by assessing potential costs and benefits.

What is the importance of employee motivation?

It increases staff retention, productivity, workplace satisfaction, and overall morale.

What is the role of leadership in the maturity stage of a business?

To facilitate growth and foster intrapreneurship among employees.

What is the significance of a positive workplace culture?

It attracts and retains staff, leading to higher employee dedication and performance.

What is the impact of constant training in the maintenance phase?

It ensures employees grow and adapt, maintaining their engagement and productivity.

Q3 - Challenges of the maturity stage

Market saturation, declining growth, loss of market share; pressure to innovate or expand; Example: Kmart facing online competition.

Q4 - Expansion strategies

Vertical growth (supply chain control); Horizontal growth (new markets/customers); Niche markets, exporting, innovation, R&D, emerging tech; Example: Apple diversifying into wearables.

Q5 - Risk management & strategic planning

Strategic planning identifies risks early; Risk management mitigates threats to expansion; Example: Airlines hedging fuel costs.

Q6 - Domestic vs global markets

Domestic = home country, lower risk; Global = multiple countries, higher complexity; Example: Kmart Australia vs Walmart global.

Q7 - Leadership styles & expansion

Transformational = innovation/global expansion; Transactional = efficiency/structure; Example: Elon Musk (transformational) driving Tesla's global reach.

Q8 - Expansion strategies (repeat focus)

Vertical/horizontal growth, niche, exporting, innovation, R&D, emerging tech; Example: Netflix expanding into gaming.

Q9 - Modes of entry

Licensing, agents/distributors, strategic alliances, joint ventures, overseas manufacturing, subsidiaries; Example: McDonald's franchising globally.

Q10 - Risk management in expansion

Identifies financial, cultural, logistical risks; Minimises impact with contingency plans; Example: Zara managing supply chain risks.

Q11 - Contingency planning

PPRR model (Prevention, Preparedness, Response, Recovery); Fiedler's model (leadership effectiveness depends on situation); Example: Airlines contingency for strikes.

Q12 - Risk management & strategic planning (repeat)

Same as Q5.

Q13 - Employment cycle

Development = training, culture building; Maintenance = motivation, retention, wellbeing; Example: Google's ongoing staff development programs.

Q14 - Intrapreneurship

Employees drive innovation internally; Inspire creativity, improve operations; Example: 3M employee creating Post‑it Notes.

Q15 - Employer of choice

Attracts/retains talent in competitive markets; Positive culture, flexibility, wellbeing; Example: Atlassian offering growth opportunities.

Q16 - Diverse workforce

Diversity improves adaptability/problem‑solving; HR ensures inclusivity (Anti‑Discrimination Act 1991); Example: Qantas promoting diverse hiring.

Q17 - Motivation theory & staff retention

Maslow, Herzberg, Locke, Seligman → wellbeing & motivation; Motivated staff = higher retention; Example: Salesforce using PERMA framework.

Q18 - Financing global operations

Private equity, IPO, capital markets, dividends, government grants; Example: Spotify IPO for global expansion.

Q19 - Power Interest Grid (PIG)

Maps stakeholders by power vs interest; Guides communication & strategy; Example: Government regulators (high power, high interest).