B.S.

• Retrenchment?


  Process whereby an organisation reduces the number of employees for operational reasons.
• Compulsory benefits?


  Refers to benefits that a businesses are legally required to offer its employees.
• Inspections?


  A method in which only a selections of products from a batch is measured and tested against required standard.
• Deviations?


  When the product differs from the standard.
• Tolerance limit?


  The extent in which a product is allowed to differ from the standard without affecting quality,
• Forward Vertical Integration (1)?

  A business combines with or takes over its distributors.

  Involves expansion of business activities to gain control over the direct distributors of the products.
• Backward Vertical Integration (2)?

  • A business combines with or takes over its suppliers.
  • Aims at decreasing the business's dependency on the supplier.
• Horizontal Integration (3)?

  • A business takes control of / incorporates other businesses in the same industry which produce / sell the same goods/services.
  • The aim is to reduce the threat of competition.
• Intensive Strategies:

  1. Market Penetration
  2. Market Development
  3. Product Development
• Market Penetration (1)?

  • New products penetrate an existing market at a low price, until it is well known to the customers and then prices increase.
  • Focuses on gaining a larger share of the market by reducing prices to increase sales.
• Market Development (2)?

  • It is a growth strategy where businesses aim to sell its existing products in new markets
• Product Development (3)?

  • Businesses generate new ideas and develop new products/services.
• Advantages of Intensive Strategies:

  • Increase in sales and profitability
  • Improved service delivery may improve business image
  • Businesses may have more control over the prices of products/services
  • Gain loyal customers through effective promotion campaigns
• Diversification Strategies:

  1. Concentric Diversification
  2. Horizontal Diversification
  3. Conglomerate Diversification
• Concentric Diversification (1)?

  • The business adds a new product/service that is related to existing products and which will appeal to new customers.
• Horizontal Diversification (2)?

  • The business adds new products or services that are unrelated to existing products, but which may appeal to existing customers
• Conglomerate Diversification (3)?

  • The business adds new products or services that are unrelated to existing products which may appeal to new groups of customers.
• Advantages of Diversification Strategies:

  • Increase sales and business growth
  • Improve the business brand and image
  • Reduces the risk of only relying on one product
  • Businesses gain more technological capabilities through product modification