KEY STRATEGIC ISSUES BUSINESS VOCABULARY IN USE (ADVANCED)

 

BUSINESS VOCABULARY IN USE (ADVANCED) 19. KEY STRATEGIC ISSUES

 

A Industries and their players In some industries, like steel and tyres, there are few companies: these industries are concentrated. Other industries are fragmented: for example there are millions of restaurants worldwide, and even the largest chain McDonalds, only has a market share of less than one per cent in terms of all restaurant meals served worldwide. Some industries have low entry barriers – anyone with a small amount of capital can open a restaurant. B Mergers and acquisitions (M&A) Some companies are very acquisitive, buying competitors in their industry or companies in other industries in a series of acquisitions or takeovers, which it may refer to as strategic acquisitions. Or a company may merge or combine as an equal with another company of similar size. A company may also buy its suppliers and customer companies in a process of vertical integration. The result of this may be an unwieldy conglomerate, a holding company with a large number of subsidiaries, which may not be easy to manage profitability as a group. C Make or buy? Recent strategic thinking holds that conglomerates are not good. Many conglomerates have disposed of or divested their non-core businesses, selling them off in order to concentrate on their core business. This is related to the make or buy decision, where companies decide whether to produce particular components or perform particular functions in-house or to buy them in from an outside supplier. EXERCISES 19.1 Complete the crossword with appropriate forms of expressions from A, B and C opposite. Across: 7 and t Things that make it difficult to get into an industry. (5,8) 9 When a company sells a business activity. (10) Down: 1 A Large industry with not many companies is _______. (12) 2 When two companies join as equal partners, they _______. (5) 3 A company’s most important business activity; its _______ business. (4) 5 A company that buys a lot of other companies is _______. (11) 6 A large industry with lots of small competitors is __________. (10) 8 A profitable industry that companies want to get into is __________. (10) 10 and 11 across When a company buys its supplies or customers (8,11) 12 In a fragmented industry, each competitor only has a small market __________.(5) 14 If an industry is easy to get into, entry barriers are __________(3) 19.2 An executive in a consumer goods company is talking. Complete what she says with expressions from A and B opposite. (There are two possibilities for one of the gaps.) ‘We make a wide range of consumer goods. Over the years we have made a number of (1) _______ _______, buying companies that fit in with our long-term plan of being the number one consumer goods company in Europe. These (2) _______ mean that we now own a large number of (3) _______,

ANSWER KEY