Topic 9: Pursing Strategy

• Organic Growth

  is the expansion achieved through the current business activities. It is about expanding using the business's own capabilities and resources.
• External Growth

  is when a business grows by partnering with, acquiring, or merging with other companies. It's growing by joining forces with other businesses.
• Retrenchment

  is when a business decides to significantly cut or scale back its activities.
• Greiner's Model of Growth

  is a theory that businesses go through 5 stages of growth, each followed by a crisis that must be solved to move to the next stage.
• Innovation

  is the process of creating something new, different, and better, often to meet a specific need or solve a problem.
• Product Innovation

  is the introduction of a good or service that is new or has significantly improved characteristics or intended uses. In other words, improving a product that already exists but adding something new or special to it or making a new product.
• Process Innovation

  is the implementation of a new or significantly improved production process or delivery methods to be more efficient and faster
• Invention

  is the creation of a completely new product, process, or concept that has never existed before.
• Patent

  is a license granted to an inventor to protect their new product, process, or design.
• Trademark

  is a symbol, word, or words legally registered or established by use as representing a company or product.
• Copyright

  is a legal right that gives creators the exclusive right to use and distribute their original work such as songs or movies.
• Intrapreneurship

  is when employees within a company are to act like entrepreneurs, bringing in new ideas and innovation into the business.
• Benchmarking

  is the process by which a company compares its performance and business activities with a high-performing organisation.
• Research and Development
• Define economies of scale

  refer to the cost advantages that a business can achieve when it produces or operates on a larger scale.
• Economies of scope

  Arises when unit cost lower when a business produces a wider range of products rather than specialised in just one or a few products
• Define the experience curve

  means as the business becomes more experience in producing a particular product, the lower its costs.
• Overtrading

  Occurs when a business expands too quickly without having the financial resources to support such a quick expansion.
• What are the 2 types of synergy?

  Cost synergy

  Revenue Synergy
• What are the three types of intellectual property?

  Patent

  Copyright

  Trademark
• What are the five stages of growth in the Grieners Growth Model?

  Creativity

  Direction

  Delegation

  Coordination

  Collaboration
• What are the Five crisis in Greiners Growth Model?

  Leadership

  Autonomy

  Control

  Red Tade

  Growth Crisis
• What are the 4 ways to become innovative?

  Kaizen

  Research and Development

  Intrapreneurship

  Benchmarking
• What are the 4 methods of entering an international market?

  Exports

  Licensing

  Alliances

  Direct Investment
• Offshoring

  is the relocation of a business activity from the home country to a different international location.
• Reshoring

  is the opposite of offshoring. It is the process of bringing back business operations from overseas to the home country.
• Explain Stage 1: Creativity in Greiners Growth Model

  When an organization is starting out, it focuses on creating a product or service and finding customers. The main challenge at this stage is managing the increasing workload and maintaining the entrepreneurial spirit.
• In Greiners Growth model, when organisation are young and small, there is no formal organisation structure. As it continues to grow, this informal approach no longer works and new direction and managing needs to be put in place.
• What are the 4 methods of growth?

  Mergers

  Takeovers

  Ventures

  Franchising
• What are the different types of growth?

  Vertical (forward and backward)

  Horizontal

  Conglomerate
• What are the different types of economies of scale?

  • Purchasing economies of scale
  • Technological economies of scale
  • Financially economies of scale
  • Managerial economies of scale
  • Marketing economies of scale
• Diseconomies of scale

  is when a business grows so large that the costs per unit increase.
• Synergy

  is when the whole is greater than the sum of the individual parts.
• Cost Synergy

  refers to the financial benefits gained by combining entities that result in cost savings and improved financial performance.
• Revenue synergy

  refers to the increased sales and revenue generated through the combination of entities.
• What are the 6 tools and concepts used to help businesses plan and manage their growth effectively? These terms all relate to different aspects of how a business can grow and the effects of that growth.

  Economies of scale

  Diseconomies of scale

  Economies of scope

  The Experience Curve

  Synergy

  Overtrading
• Mergers


  Mergers are two or more businesses agree to join together
• A merger is a combination of two previously separate firms which is achieved by forming a completely new business into which the two original firms are integrated.

  They might keep the name of one of the original companies, or come up with a new name.
• Takeovers

  Takeovers (acquisitions) is when a company buys over 50% of the shares or assets of another company and becomes the controlling owner of it.
• What are the two types of takeovers?

  Friendly Takeover

  Hostile Takeover