3.9 Strategic methods: how to pursue strategies (A-level only)

3.9.1 Assessing a change in scale

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The reasons why businesses grow or retrench

Types of growth to include organic and external

The difference between organic and external growth

 

How to manage and overcome the problems of growth or retrenchment

Issues with growth should include:

  • economies of scale (including technical, purchasing and managerial)
  • economies of scope
  • diseconomies of scale
  • the experience curve
  • synergy
  • overtrading.

Issues with managing growth should include Greiner’s model of growth.

The impact of growth or retrenchment on the functional areas of the business

 

Assessing methods and types of growth

Methods of growth to include mergers, takeovers, ventures, franchising

Types of growth to include vertical (backward and forward), horizontal and conglomerate integration

3.9.2 Assessing innovation

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The pressures for innovation

Types of innovation should include product and process innovation.

The value of innovation

 

The ways of becoming  an innovative organisation

Ways of becoming innovative include:

  • Kaizen
  • research and development
  • intrapreneurship
  • benchmarking.

How to protect innovation and intellectual property

Ways of protecting intellectual property include patents and copyrights.

The impact of an innovation strategy on the functional areas of the business

 

3.9.3 Assessing internationalisation

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Reasons for targeting, operating in and trading with international markets

Methods of entering international markets include:

  • export
  • licensing
  • alliances
  • direct investment.

Factors influencing the attractiveness of international markets

 

Reasons for producing more and sourcing more resources abroad

Decisions regarding producing overseas include off-shoring and re-shoring.

Ways of entering international markets and value of different methods

Targeting overseas markets may include being a multinational.

Influences on buying, selling and producing abroad

 

Managing international business including pressures for local responsiveness and pressures for cost reduction

Managing international business includes Bartlett and Ghoshal’s international, multi-domestic, transnational and global strategies.

The impact on internationalisation for the functional areas of the business

 

3.9.4 Assessing greater use of digital technology

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The pressures to adopt digital technology

Digital technology should include e-commerce, big data, data mining and enterprise resource planning (ERP).

The value of digital technology

 

The impact of digital technology on the functional areas of the business