IB Business Management Unit 1.7 Growth and Evolution

IB Business and Management Unit 1.7 Growth and Evolution Pages 112-136

1. Focus Questions ,[object Object],[object Object]

2. An Overview ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

3a. Economies & Diseconomies of Scale ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

4. Internal Economies of Scale ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

5. External Economies of Scale ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

6a. Diseconomies of Scale ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

6b. Diseconomies of Scale ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

6c. Diseconomies of Scale ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

7a. Small vs Large Organizations: ,[object Object],[object Object],[object Object],… Stock market valuation … Balance sheet valuation Market value… Capital employed Profit Size of the workforce Total Revenue Market share Can be Measured by:

7b. Small vs Large Organizations: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

7c. Small vs Large Organizations: ,[object Object],Barrier to entry More choice Improved Customer loyalty Discounts Convenience Image And reliability Brand Recognition Other benefits of being large

7d. Small vs Large Organizations: ,[object Object],[object Object],Small Market Size Flexibility Personalized services Local Monopoly Power Government aid Financial risk Cost control Other benefits of being small

7e. Small vs Large Organizations: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

IB Business and Management Unit 1.7 Internal (Organic) Growth / External Growth Pages 119-128

2. Internal Growth ,[object Object],[object Object],[object Object],[object Object]

3a. External Growth ,[object Object],[object Object],[object Object]

3b. Can Grow in Several Ways : ,[object Object],… Stock market valuation Training and development Capital expenditure Credit Payment terms Placements (locations) Better products Advertising And promoting Changing price Can grow in Several ways:

3c. Benefits and Limitations of Organic Growth ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

3d. External Growth ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

4. Joint Ventures : ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],High success rate Exploitation Of local knowledge Competitive advantage Cheap Entry of Foreign markets Spreading of Costs and risks Synergy Joint Venture Advantages

5a. Strategic Alliances ,[object Object],[object Object],[object Object],[object Object],[object Object],Four Key Stages 1. Feasibility study 2. Partnership Assessment 3. Contract Negotiation 4. Implementation

5b. Strategic Alliances ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Taken from: http://www.maximizepossibility.com/RMGpictures/Synergy.jpg

6a. Mergers and Takeovers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Taken from: http://30gms.com/images/uploads/sharks.jpg

6b. Mergers and Takeovers 4. Conglomerate M & A (diversification) 3. Lateral Integration (similar operations) 2. Horizontal Integration (same industry) 1b. Backward Vertical Integration (towards supplier) 1a. Forward Vertical Integration (towards consumer) 1. Vertical Integration (different stages of production) Four Types Of Integration

6c. Mergers and Takeovers Diversification Survival Synergy 1+1=3 Economies of Scale Greater Market share The Advantages of M & A’s

6d. Mergers and Takeovers Regulatory Problems Diseconomies of Scale Redundancies Conflict Culture Clash Loss of Control The Disadvantages of M & A’s

6e. Mergers and Takeovers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

6f. Mergers and Takeovers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

IB Business and Management Unit 1.7 Franchises Pages 128-136

1. Focus Questions ,[object Object],[object Object],[object Object]

2a. Franchises ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

2b. Franchises ,[object Object],[object Object],[object Object],Greater local Market awareness More incentives Receive a Royalty payment Less worry about The running costs Economies of scale Allows for a National or International presence Rapid growth Without huge risks Benefits of Franchising

2c. Franchises ,[object Object],[object Object],[object Object],Large scale Advertising – Reducing costs Added services Lower start-up costs Low risk High success Advantages for The franchisee

2d. Franchises ,[object Object],[object Object],[object Object],Not a quick Method of growth Huge risk to Reputation. Difficult to Control franchisees The pitfalls of franchising

2e. Franchises ,[object Object],[object Object],[object Object],Less flexibility Pay large % To the franchisor. Can be very expensive Disadvantages To franchisees

3a. The Ansoff Matrix ,[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],3b. Advantages / Limitations

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],3c. Advantages / Limitations

IB Business Management Unit 1.7 Growth and Evolution

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IB Business Management Unit 1.7 Growth and Evolution