2.2 STRATEGIES TO RESPOND TO KEY PERFORMANCE INDICATORS AND/OR SEEL NEW BUSINESS OPPORTUNITIES Flashcards
WHAT DO KPI’S DO
KPIs provide management with information that helps it to make decisions. How the manage responds, depends on the information provided by the KPI.
WHAT IS NEW BUSINESS OPPORTUNITIES?
New business opportunities refers to the new activities that a business could become involved in as a means of responding to the data from a KPI.
A business may implement any one or more of these strategies to achieve continued growth by finding new markets within this country or overseas.
RESPONSE TO KPI - STAFF TRAINING
Training is concerned with changing employee behaviour and job performance and emphasises immediate improvement in job performance.
- Managers may use the KPI to improve the immediate performance of employees.
STAFF TRAINING GENERALLY PROVIDES:
- Better knowledge in employees
- Better skills in employees
- Feeling of being valued
- Opportunities for employee group to develop together
- Career development for employee e.g leadership training
STAFF TRAINING AND NEW BUSINESS OPPORTUNITIES:
- By strengthening the skills of employees, training can be used to seek opportunities by fostering acceptance of innovation and risk
- Reputation of the business may improve as employee skills are developed, resulting in more talented or experienced workers wanting to join the business. They will want to be employed by a business that supports them in learning, as well as utilising their abilities to maximise the success of the business.
RESPONSE TO KPI - STAFF MOTIVATION
The HR Manager can implement a number of strategies.
- A motivated workforce is more inclined to work harder to achieve objectives
STAFF MOTIVATION AND NEW BUSINESS OPPORTUNITIES
- Motivated staff who are enthusiastic and hard-working may support a business in moving into new markets and growing market share
RESPONSE TO KPI - CHANGES IN MANAGEMENT STYLES
After evaluation, it may be necessary to alter the way a manager makes decisions and communicates with staff.
CHANGES IN MANAGEMENT STYLES/SKILLS AND NEW BUSINESS OPPORTUNITIES
- A change to a management style/skill that involves greater employee participation might provide opportunities for a business through improved staff engagement and employee morale.
- Employees who feel valued and confident in their abilities may support a business in moving into new markets and growing market share.
RESPONSE TO KPI - INVESTMENT IN TECHNOLOGY
Increased investment in technology is a strategy that can be used to improve the performance of a business.
- If managers evaluate a business and determine that performance indicators are not reaching set benchmarks, they can decide to invest in new or improved technologies in order to improve business performance.
INVESTMENT IN TECHNOLOGY AND NEW BUSINESS OPPORTUNITIES
- Technology can be used to create opportunities for a business, e.g. a business might expand globally through the creation of an online shop and platform. This offers customers the ability to browse available goods and services via the internet, order items and services, purchase, pay online and organise the shipment of goods.
- The whole world can be a potential market for the business, encouraging the expansion of the customer base, sales and potentially increasing their market share.
- Many other technologies, such as social media, manufacturing technology, customer databases and research technology, can be used to seek opportunities.
RESPONSE TO KPI - IMPROVE QUALITY OF PRODUCTION
Improving the quality of a product is one way to gain competitive advantage.
- May wish to improve quality when the business is performing poorly.
- Positive results from a KPI can also lead a manager to use this strategy = continuous improvement and competitive advantage.
IMPROVE QUALITY IN PRODUCTION AND NEW BUSINESS OPPORTUNITIES
- May be used to create opportunities for a business by helping to differentiate a business from its competitors. In market where there is considerable competition, it can be difficult for a particular product to stand out, make a name for itself or gain a foothold in the market if it is a new product.
- High quality can allow a product to stand out, appearing to be different from existing products on the market. This may help a business increase sales and market share.
RESPONSE TO KPI - COST CUTTING
Costs have a major impact on the survival of a business and need to be monitored closely
- Must be confident that the cost cutting activities will not compromise quality.
RESPONSE TO KPI - INITIATING LEAN PRODUCTION
As waste is reduced, quality is enhanced, speed of production increases and costs are reduced.
- This can form the basis of a major competitive advantage for a business.
Generally, wastage can be found in seven key areas of production:
- Transport unnecessary movement of products
- Inventory excess products and materials not being processed
- Motion people or products moving further than they need to
- Waiting wasting time or being held up while waiting for the next step in production
- Overproduction producing in excess of demand
- Over-processing more work or higher quality than required by consumer
- Defects faulty products or wrong information
RESPONSE TO KPI - REDEPLOYMENT OF RESOURCES
Redeployment is the transfer of resources from one area of a business to another so they can be used more effectively and efficiently.
- The main resources that are redeployed are: natural, labour and capital
NATURAL (timber, water, solar etc.): involves using existing resources for different purposes (e.g recycling water, moving to sustainable sources of energy, redeploying idle stock, etc.)
LABOUR (employees): redeploying labour is where employees are moved from one role to another. This may be necessary during downsizing (to keep valuable employees), or during the implementation of technology.
CAPITAL (machinery, buildings): can be redeployed to improve efficiency (e.g adopting new technology as it becomes available.) Changing how capital is employed will help to increase efficiency boost the return on investing in these resources.
RESPONSE TO KPI - INNOVATION
Innovation is the process of altering and improving or creating new products or procedures.
A business may innovate by:
- Developing new goods and services that meet existing customer needs.
- Promoting its products with unique marketing techniques.
- Implementing faster and more productive methods of operating.
A business that focuses on innovation can increase customer interest in its products, more readily develop a loyal customer base, and improve efficiency and effectiveness in its production process.
INNOVATION AND NEW BUSINESS OPPORTUNITIES
- Innovation will allow a business to adapt to the way the market is changing.
- Expand into new markets.
- Find new opportunities for growing revenue.
- Boost productivity and growth, giving the business an advantage over competitors.
- Ideas for new products and new services could lead to new innovation offerings to appeal to consumers - may increase sales and/or net profit figures.
RESPONSE TO KPI - GLOBAL SOURCING OF INPUTS
Involves a business acquiring raw materials and/or resources from overseas suppliers.
- Can access resources (e.g raw materials, skilled labour) that are not available domestically.
- May gain higher quality materials for a cheaper prices
GLOBAL SOURCING OF INPUTS AND NEW BUSINESS OPPORTUNITIES
- Global sourcing may allow the business to learn how to do business in a potentially new market.
- May allow business to create new product range.
RESPONSE TO KPI - OVERSEAS MANUFACTURE
Involves a business producing goods or services outside of the country where its headquarters are located
- Can take advantage of skilled labour resources and reduced operating costs.
- May improve quality of final output.
OVERSEAS MANUFACTURE AND NEW BUSINESS OPPORTUNITIES
- Manufacturing overseas may allow a business to quickly enter new overseas markets where demand for its products is growing and competition is at a minimum - meaning it can become a global brand and competitor.
RESPONSE TO KPI - GLOBAL OUTSOURCING
Involves transferring specific business activities to an external business in an overseas country.
Allows business to:
- Focus on its core business
- Minimise expenses
- Gain expertise
- Increase the quality of its operations
GLOBAL OUTSOURCING AND NEW BUSINESS OPPORTUNITIES
Global outsourcing creates opportunities for the business such as:
- Cost savings
- Improvements of quality
- Access to operational expertise (an external person or business may have expertise in managing a task or activity that the business does not have)
