Business Organisation Growing a Business Business Organisation

Benefits of expanding a business

Risks of business expansion

How do businesses expand? Vertical forward Diversification Horizontal integration Vertical backwards

Q1. Explain the difference between a merger and takeover. _______________________________________________________________________________________________________________________________________________________

Q2. Explain the difference between organic and inorganic growth _______________________________________________________________________________________________________________________________________________________

Q. Identify two ways of organic and inorganic growth

Disadvantages of inorganic growth

Conflict between stakeholders of business growth Possible benefits Possible drawbacks Workers Customers Suppliers

Defending your interests Customer… Employee…

Legal ownership Advantages Disadvantages Private limited company (Ltd) Public Limited Company (PLC)

Aims of a growing business Objectives Aims of a small business will be to survive followed by making a profit. Aims of a growing business

Ethical & environmental Why do large businesses include these in their decision making?

Location minimising costs and increasing revenues Q. Explain two risks of operating overseas.

Human Resources/People in Business Growing a Business Human Resources/People in Business

Key terms Organisational structure Hierarchy Span of control

There is no right or wrong structure!!! Flat structure - Wide span of control Tall structure – Narrow span of control There is no right or wrong structure!!!

Centralised V’s Decentralised Benefits Challenges Centralised Decentralised

Recruitment and selection process Needs analysis Job description Person specification Advertise the post Short list Interview Appoint

Induction process What could be included in an induction process for new employees at McDonalds?

Training Advantages Disadvantages On-the-job Off-the job

Appraisal What are they for? Why use them?

Motivational methods Q. State and explain two forms of monetary motivation. (4) Q. State and explain two forms of non monetary motivation. (4)

Leadership Q. State and explain what is meant by autocratic leadership. (2) Q. State and explain what is meant by democratic leadership. (2)

Growing a Business Production Revision

Efficiency is: Producing output with no/little wastage Increasing output using the same resources How can efficiency be increased? What impact might your method(s) have on employees?

Explain what is meant by lean production A production approach that aims to use fewer resources by using them more efficiently Kaizen JIT Lean design Cell production Kaizen – involves employees and make improvements – kaizen groups Lean design – designers working on different parts, using CAD – get to market quicker – higher prices – profit Cell production – job split into complete units, done by teams, training, problem solving and decision making, not as repetitive

Advantages & Disadvantages of growth Economies of scale - lower average unit cost Diseconomies of scale – communication, motivation, coordination

Explain two quality issues that a growing business may face Lack of consistency Outsourcing Poorly motivated employees

Explain the difference between quality assurance and TQM Sets agreed quality standards Involves all employees Responsibility of all – ensure and monitor No separate quality department Training

Growing a Business Finance Revision

Advantages and disadvantages of sources of finance Retained profits Loan or mortgage Selling unwanted assets Share issue

Lowe’s Weddings is considering purchasing a new premises Lowe’s Weddings is considering purchasing a new premises. They are unsure whether to use retained profit or obtain a mortgage. Advise Lowe’s Weddings which option they should choose. Justify your view. (9)

Explain how the following are useful to stakeholders Profit & Loss Shareholders Employees Bank Balance sheet

What do the following say about the business? Gross profit margin Net profit margin _____________________________ Current ratio Acid test ratio

Growing a Business Marketing Revision

The product life cycle Development Introduction Growth Maturity Decline Explain how demand will be affected in the maturity stage Explain how a business could extend the life of their product

Explain two factors that could influence pricing decisions The degree of competition The nature of the market – luxury, inferior, innovative, mass market, niche market Costs of production

Explain two factors that will influence the selection of the promotional mix Costs and affordability Nature of the product – sold to businesses or end customers? Mass or niche market product? Nature of the market – local or national? Activities of competitors

Explain which channel of distribution the following products could be distributed by Books TV Insurance Designer clothing

This session is NOT instead of your own revision and does not replace all the hard work that you have put in for 2 years. Here are the areas that have not been covered: Production Difference between division of labour and specialisation Advantages of TQM External economies of scale Finance Components of the P&L and balance sheet Marketing How and why businesses broaden their product portfolio Pricing methods Promotional methods Channels of distribution