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business Year 12 - Coggle Diagram
business Year 12
strategic alliances
outsourcing- contracting/subcontracting of non-core actives to free up cash, staff, time and facilities
acquisition- taking over another business- Type 1 hostile- directly to shareholders, type 2 friendly- shares are agreed
joint venture- an alliance where businesses involved start up a new independent company. Each partner gets a % of the company
mergers- 2 companies form a new company- Type 1 horizontal- same industry combine, Type 2 Vertical- company & supplier merge, Type 3 Conglomerate- buying an existing company in a new market
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resistance to change
financial costs- cost of restructuring, upgrading, retraining or redundancy payments
staff attitude- without communication, staff feel left out, leads to lack of job satisfaction
cultural incompatibility in mergers- causes clash of ideas and relations between people due to values, ideas and policies
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role of ethics
offshore labour- sweatshops, child labour
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minimising risk
documents- level of credit a document from the customers bank saying money will be paid, documents against payment- the exporter uses their back to send a bill and document to overseas bank, bank gives the document back to the customer after the payments made
insurance - export credit: cover the cost of unpaid orders, political risk insurance- transport problems & civil unrest, transit- covers cost of lost goods
hedging- forward- exporter & consumer sign a contract that sets the exchange rate for the transaction, option- exchange rate is set and can be used instead of the current exchange rate
benefits of innovation
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Expansion of global market presence- ability to expand results in economies of sale & reduce production costs
production
mass- decrease unit cost of production, but theres a high start up cost and it isn't flexible
batch- output can be adjusted based on product sales, but theres a lot of waste and you have to pay for storage
job production- individual, one off product, increases motivation of workers and increases quality but is very time consuming
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quality management
Quality control- traditional method; involves checking and reviewing work processes; inspecting, testing and sampling quality of products, you can find faults in the product and widespread issues, doesn't fix the issue
Quality assurance- guarantees the consumer of a products quality, informs the customer that the product has been made to certain standards or specifications, gives a competitive advantage, more concerned with preventing more quality than rectifying problems