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CIMA - E2 > 1. Business Models > Flashcards

1. Business Models Flashcards

1
Q

What are the 2 traditional appraisal methods of an organisation’s environment? (and which is macro/micro)

A

PESTLE (macro) and Porter’s Five Forces (micro)

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2
Q

What are the factors considered in PESTLE analysis?

A 
Political
Economic
Social
Technological
Ecological
Legal
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3
Q

What are the 3 levels of PESTLE analysis?

A

Local, National and Global

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4
Q

What do porter’s 5 forces determine?

A

The competitive intensity, and therefore the attractiveness, of a market

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5
Q

What are porter’s five forces?

A
  1. Threat of substitutes (same need, different way)
  2. Threat of new entrants
  3. Bargaining power of customers
  4. Bargaining power of suppliers
  5. Intensity of competitive rivalry
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6
Q

What is porter’s ‘sixth force’?

A

The government

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7
Q

What are porter’s 3 generic strategies?

A
  1. Cost Leader (lowest cost)
  2. Differentiation (do things differently, higher price)
  3. Niche or focus
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8
Q

What is the risk to companies who do not adopt a strong generic strategy, when costs rise or selling prices fall?

A

Being ‘stuck in the middle’

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9
Q

What is a business ecosystem?

A

An economic community supported by a foundation of interacting organisations and individuals

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10
Q

Does a strong ecosystem mean high or low barriers to entry?

A

High

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11
Q

What are member organisms of an organisation ecosystem?

A

The customers, suppliers, producers, competitors and other stakeholders

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12
Q

What is one of the key features of the business ecosystem?

A

It evolves over time, and members evolve with it

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13
Q

What is the most key factor has lead to the increasing speed of ecosystem evolution?

A

Digitisation

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14
Q

What three factors contribute to digitisation in relation to changing ecosystems?

A
  1. The extent of the internet and its access
  2. The wealth of data available for decision making
  3. Customer empowerment
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15
Q

What 5 things does the digital customer most want, according to the World Economic Forum?

A
  1. Tailored products
  2. Seamless experience across channels
  3. Anytime, any where
  4. Great service
  5. Peer review and advocacy
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16
Q

What 4 methods can organisations use to meet the demands of the digital customer?

A
  1. Design thinking
  2. Experiential pilots
  3. Prototyping
  4. Brand atomisation
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17
Q

What are the 4 types of business model, according to Libert, Beck and Wind?

A
  1. Asset Builder
  2. Service Provider
  3. Technology creator
  4. Network Orchestrator
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18
Q

What is a network orchestrator?

A

Companies that deliver value through connectivity, creating a platform for transactions and interaction

19
Q

What are the 10 principles of network orchestration?

A
  1. Create digital capabilities
  2. Invest in intangible assets
  3. Actively allocate your capital
  4. Lead through co-creation
  5. Invite your customers to co-create
  6. Focus on subscriptions
  7. Embrace the freelance movement
  8. Integrate big data
  9. Choose leaders who represent your customers
  10. Open your mind to new posibilities
20
Q

What is mutuality?

A

The concept of working together, building a community that is fundamental to the network orchestrator conceptt

21
Q

What are thee 4 main technological developments that have enabled platform organisations?

A
  1. Cloud computing
  2. Social media
  3. Mobile technology
  4. Data analytics
22
Q

What are the two key factors of an ecosystem?

A

The participants and the interactions

23
Q

What are the 3 characteristics of the participants in an ecosystem?

A

Role (what they do)
Reach (how far they extend)
Capability (key value prop)

24
Q

What are the 3 characteristics of the interactions in an ecosystem?

A

Rules (define how)
Connections (links)
Course (speed and direction)

25
Q

What are the underpinning concepts in an ecosystem?

A

Mutuality (working together) and orchestration (co-ordination)

26
Q

What 3 factors determine the complexity of an ecosystem?

A
  1. Number and diversity of participants
  2. Sophistication of activities
  3. Range and nature of relationships
27
Q

What 3 factors determine the orchestration of an ecosystem?

A
  1. Strength and extent of influence
  2. Formality of interactions
  3. Degree of enforceability
28
Q

What is a shark tank ecosystem?

A

Low complexity, low orchestration
Need to innovate to survive
E.g. Retail

29
Q

What is a hornet’s nest ecosystem?

A

High complexity, low orchestration
High barriers to entry
e.g. Media

30
Q

What is a lion’s pride ecosystem?

A

High complexity, high orchestration
Dominated by a powerful orchestrator
E.g. healthcare

31
Q

What is a wolf pack ecosystem?

A

Low complexity, high orchestration

E.g. utilities

32
Q

What is outsourcing?

A

Getting a specialist external provider to take over the supply of a product or service

33
Q

What are the advantages of outsourcing? (4)

A
  1. Can concentrate on core competencies
  2. Cheaper, economies of scale
  3. Access to expert knowledge
  4. Greater cost certainty
34
Q

What are the disadvantages of outsourcing? (2)

A
  1. Confidentiality concerns

2. Difficulty finding a reliable partner

35
Q

What is offshoring?

A

Transfer of an activity to a foreign country

36
Q

What is a shared service centre?

A

A separate business unit created within a company to deliver a specific service to the company

37
Q

What is a strategic alliance?

A

An arrangement between two or more organisations to share resources to undertake a mutually beneficial project

38
Q

What are the benefits of a strategic alliance? (2)

A
  1. Less involved + less permanent than a joint venture

2. Maintain autonomy

39
Q

What are the 4 alternative types of alliance?

A
  1. Franchising
  2. Consortia
  3. Licensing
  4. Joint venture
40
Q

What are virtual teams?

A

Geographically dispersed teams that use tools on the internet to communicate and collaborate

41
Q

What are virtual companies?

A

Companies whose members are geographically dispersed, a network of alliances and subcontracting arrangements

42
Q

What are the 3 key risks associated with changing business ecosystems?

A
  1. Being left behind
  2. Investing in the wrong technology
  3. Failing to harness the potential of big data
43
Q

What are the 2 key opportunities associated with changing business ecosystems?

A
  1. New products and services

2. New platforms and partnerships

44
Q

What is the main difference between the traditional approach and the ecosystem stance on creating value?

A

Barriers should be removed, and the network creates value as a whole

CIMA - E2 (8 decks)

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