Business Revision Unit 3 IA1

Maturity Stage

When a business has fulfilled its current market, growth slows, or it has peaked

Motivations for Expansion

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

Ansoff Matrix (MP, PD, MD, D)

Four strategies: market penetration, product development, market development, diversification

Vertical Growth

Expanding within existing processes/customers to increase market share

Horizontal Growth

Expanding into new locations/customers with existing products

Domestic Market

Expansion within home country, familiar environment, reduced risks

Global Market

Expansion across multiple countries, influenced by GDP and globalisation

Emerging Market

Economy with growing population, disposable income, less efficiency than advanced markets

Environmental Factors

Internal, external operating, external macro (STEEPLE: socio-cultural, technological, economic, environmental, political, legal, ethical)

Niche Market

Small, unique market segment with specific needs

Innovation

Product, process, marketing, organisational innovation → competitive advantage

Research & Development

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

Emerging Technologies

Disrupt industries, drive growth, create niche markets

Modes of Entry

Exporting, importing, licensing, agents/distributors, alliances, joint ventures, overseas manufacturing, subsidiaries

Risk Management

Identifying, evaluating, mitigating risks in expansion

Contingency Planning

Prepared plan of action to mitigate future events (PPRR model)

Employment Cycle

Acquisition, development, maintenance, separation

Motivation Theories

Maslow, Herzberg, Locke, Seligman PERMA

Employer of Choice

Business that attracts/retains staff through positive culture, flexibility, wellbeing

Diverse Workforce

Employees from varied backgrounds (age, gender, ethnicity, etc.)

Intrapreneurship

Employees with entrepreneurial mindset fostering innovation internally

Leadership Styles

Authoritative, charismatic, bureaucratic, authentic, transactional, transformational

Financial Management

Planning, organising, leading, controlling business funds

Financial Controls

Strategies to manage finance risks (exchange rates, hedging)

Triple Bottom Line

People, planet, profit – ethical/sustainable decisions

Private Equity

Investment in private companies or buyouts of public companies

Capital Markets

Trade of financial securities (stocks, bonds)

IPO (Going Public)

Initial Public Offering. Refers to the influx of stakeholders such as new consumers and investors when a previously private company goes public.

Dividends

Portion of profit paid to shareholders

Government Grants

Funding to encourage growth, no repayment required

Cost-Benefit Analysis

Evaluating feasibility by weighing costs vs benefits

SWOT Analysis

Strengths, Weaknesses, Opportunities, Threats

Power Interest Grid (PIG)

Categorises stakeholders by power and interest