§-Module

Unit 3: Business diversification

4 dot points across 4 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

Topic 1: Competitive markets and the rationale for diversification

Competitive markets - the structure of markets (perfect competition, monopolistic competition, oligopoly, monopoly); Porter's five forces (industry rivalry, bargaining power of suppliers, bargaining power of buyers, threat of new entrants, threat of substitutes); and the implications of competitive intensity for diversification

A focused answer to the QCE Business Unit 3 dot point on competitive markets and Porter's five forces. Market structures, the five forces with Australian applications, and how competitive intensity drives the diversification decision, with worked examples from Australian supermarkets, banks and miners.

9 min answer →

Topic 2: Entering global markets - using financial analysis for diversification decisions

Financial ratio analysis to inform diversification decisions - profitability ratios (gross profit, net profit, return on equity), liquidity ratios (current, quick), efficiency ratios (asset turnover, accounts receivable turnover) and gearing ratios (debt to equity); interpretation of ratios in context

A focused answer to the QCE Business Unit 3 dot point on financial ratio analysis. The key profitability, liquidity, efficiency and gearing ratios, the formulas, the interpretation in context, and the use for diversification decisions, with worked calculations.

9 min answer →

Topic 1: Strategies for growth and diversification

Growth and diversification strategies - the Ansoff matrix (market penetration, market development, product development, diversification), related and unrelated diversification, organic v inorganic growth (mergers, acquisitions, takeovers), and horizontal, vertical and conglomerate integration - and the risk-return profile of each

A focused answer to the QCE Business Unit 3 dot point on growth and diversification. The Ansoff matrix, related v unrelated diversification, organic v inorganic growth, horizontal, vertical and conglomerate integration, and the risk-return trade-offs, with worked Australian examples from Wesfarmers, Coles and Telstra.

9 min answer →

Topic 2: Entering global markets

Market entry strategies for global diversification - exporting (direct and indirect), licensing, franchising, joint venture, foreign direct investment (greenfield and acquisition) - and the risk-return profile of each

A focused answer to the QCE Business Unit 3 dot point on global market entry. Exporting (direct/indirect), licensing, franchising, joint venture, foreign direct investment (greenfield and acquisition), the risk-return profile of each, and worked Australian examples from BHP, Cochlear, Atlassian and Bunnings.

9 min answer →