Types of organizations 1
A non profit social enterprise that provides voluntary support for good causes such as protection of children, animals and the natural environment
What is a charity?
A term for sole traders and ordinary partnerships who are legally responsible for all money owed to their creditors, even if this means they have to sell their personal possessions to pay for their debts.
What is unlimited liability?
A high risk growth strategy that involves selling new products in new markets. For example, Coca Cola buying Costa Coffee.
What is diversification?
When costs of a business go down as a result of business growth. For example, if a publisher prints 7000 books they might be able to negotiate a cheaper price for paper than if they only printed 500.
What is economies of scale?
When two businesses agree to combine resources for a specific goal and over a finite period of time. For example, the Sony Ericsson phone.
What is a joint venture?
A self employed person who runs and controls the business and is the sole person held responsible for its success(profits) or failure(unlimited liability).
What is a sole trader?
An incorporated business that allows the public to buy and sell shares in the company via a stock exchange. Shareholders are not responsible if the business experiences creditor issues.
What is a public limited company?
A low risk growth strategy where businesses choose to sell existing products in existing markets. For example, Starbucks opening more shops in Ningbo.
What is market penetration?
When a business grows from within. The business expands by selling more products of its own.
What is internal or organic growth?
When an entrepreneur buys the rights to sell another companies concept and products. The buyer needs to be consistent with the original business concept. For example, buying a McDonald's or Subway store.
What is a franchise?
Organizations that are under the ownership and control of the government(e.g. health care, public education, law enforcement etc).
What is the public sector?
A private sector not-for-profit social enterprise that operates for the benefit of others rather that to make profit, e.g. UNICEF(children's welfare)
What is a non-government organization(NGO)?
A medium risk growth strategy that involves selling new products in existing markets. For example, McDonald's adding sausage to their hamburgers in Beijing.
What is product development?
When two businesses in the same business and industry merge together.
What is horizontal integration?
When costs go up as a business grows larger. The business becomes less efficient. For example, losing a lot of money by expanding too quickly.
What are diseconomies of scale?
A profit seeking business owned by 2-20 people who share profits and losses
What is a partnership?
When a business sells its shares to shareholders on a stock exchange for the first time.
What is an initial public offering(IPO)?
A medium risk growth strategy that involves selling existing products in new markets. For example, Wal Mart and Sam's Club opening around China
What is market development?
When a business integrates further in the chain of production. For example, in 2002 Disney merged with the major US TV company ABC. Disney now has their own outlet for proving shows directly to customers.
What is forward vertical integration?
When the whole of a business is greater than the individual parts. For example, a company that does backward vertical integration and works very well with the suppliers. e.g. when employees and different stakeholders work very efficiently together.
What is synergy?
A company that cannot raise share capital from the general public. Instead, shares are sold to private family members and friends.
What is a private limited company?
A for profit social enterprise set up, owned and run by their members, who might be employees and/or customers.
What is a cooperative?
Amazon buying Whole Foods (an example of which growth strategy?)
What is diversification?
When two businesses in unrelated businesses integrate. This is a type of diversification to reduce corporate risks. For example, the Indian company Tata integrating Tata Steel, Tata Television, Tata Motors and Tata Hotels together.
What is a conglomerate?
Offering products that are unique and highly specialized. This type of business is different to mass marketing and targets a specific target market with a well defined product.
What is niche marketing?