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24 Cards in this Set
- Front
- Back
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Business plan
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a written document that describes a business its objectives and its strategies, the market it is in and its financial forecasts
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Intuitive decision making
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involves making decisions on instinct or ‘gut feeling’ (perhaps based on the manger’s experience) for a situation and the options available
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Scientific decision-making
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involves basing decisions on a formal framework and a data analysis of both the problem and the option available
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Internal constraints
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limiting factors in decision making that can be controlled by the organization
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External constraints
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limiting factors in decision-making that are beyond the organization’s control
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Scale of operation
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the maximum output that can be achieved using the available inputs (resources)- this scale can only be increased in the long term by employing most of all inputs
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Economies of scale
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reductions in a firm’s unit (average) costs of production that results from an increase in the scale of operations
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Diseconomies of scale
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factors that cause average costs of production to rise when the scale of operation is increased
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Internal growth
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expansion of a business by means of opening new branches, shops or factories (also known as organic growth)
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External growth
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business expansion achieved by means of merging with or taking over another business, from either the same or a different industry
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Horizontal integration
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integration with a firm in the same industry and at the same stage of production
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Forward vertical integration
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integration with a business in the same industry but a customer of the existing business
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Backward vertical integration
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integration with a business in the same industry but a supplier of the existing business
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Conglomerate integration
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merger with or takeover of a business in a different industry
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Merger
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an agreement by shareholders and mangers of two businesses to bring both firms together under a common board of directors with shareholders ion both businesses owning shares in the newly merged business
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Takeover
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when a company buys over 50% of the shares of another company and becomes the controlling owner- often called an ‘acquisition’
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Joint venture
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two or more businesses agree to work closely together on a particular project and create a separate business division to do so
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Strategic alliances
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agreements between firms in which each agrees to commit resources to achieve an agreed set of objectives
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Franchise
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a business that uses the name, logo and trading systems of an existing successful business
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Ansolf’s matrix
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a model used to show the degree of risk associated with the four growth strategies of market penetration, market development, product development and diversification
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Market penetration
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the objective of achieving higher market shares in existing markets with existing products
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Product development
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the development and sale of new products or new developments of existing products in existing markets
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Market development
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the strategy of selling existing products in new markets
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Diversification
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the process of selling different, or unrelated goods or services in new markets
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