3.7.3 Anyalysing Internal Position Flashcards
What are the 3 measures of internal performance
Marketing
Operations
Human resource
Identify to measures of marketing performance
Product information - may include future sales forecast / product portfolio analysis and details on market share
Market research data - this may include customer opinions such as brand recognition and satisfaction levels
Identify two measures of operational performance
Quality - business may use factors such as customer repeat purchase, product defects or satisfaction levels
Capacity utilisation - maximum output relative to existing output (key measure of efficiency
Identify two measure of human resource performance
Unit labour costs - calculated labour costs relative to output
Labour turnover, retention and absenteeism - may give an indication of employee happiness / motivation and the effectiveness to recruit
What are core competencies and how are they developed
The unique abilities a business possesses that provides it with a competitive advantage - developed over a period of time through the learning and skills developed within a business relating to the production of goods and services
Benefits of core competencies
- gives a business uniqueness
- add value to a product
- difficult for competitors to imitate
- focusing on core competencies enables a business to develop key efficiencies
- allows a business to enter various markets
Criticism of core competencies
- as markets and environments evolve, businesses must have the ability to develop new skills and strengths ( cannot rely on core competencies)
- outsourcing areas of the business can lead to a fragmented workforce
- core compentencies take time to develop and nature
What four measures might allow a business to view long term performance
Research and development
Profit quality
Employee engagement
Sustainability
How might a business use R&D as a measure of long term performance
Investment might give a indication of the likely impact of product development and innovation in the future - however no direct link between levels of r&d spending and the level of innovation
How might profit quality be used as a long term measure of performance
Firms may choose to focus on profits that will be able to sustain in the future. Net profits do nor always give good indication of this where exceptional items are included
How might employee engagement be used as a measure of long term performance
High levels of employee engagement are likely to return rewards in the future and lead to greater levels of productivity and innovation.
How might sustainability be used to measure long term performance
A sustainable approach to a business is one that can be conducted in the long term. Can be measured through the corporate social responsibility audit or report
What do short term measures of performance include
Cash position
Revenue
Productivity
Profit
What is the Kaplan and Norton’s balanced score card and what does it aim to do
It’s a planning and management tool which is used to match a businesses activities to its vision and strategy. Aims to improve internal and external communication and monitor organisations performance against strategic goals
4 aspects of the balanced scorecard and measures that may be included within the 4 aspects
1) Financial - to succeed financially how should we appear to our shareholders (revenues, Profits, ROCE, cash flow (working capital)
2) Internal business process - to satisfy our shareholders and customers what business processes must we excel at ( productivity, quality and efficiency)
3) learning and growth - to achieve our vision how will we sustain our ability to change and improve ( effectiveness of training, employee engagement,R&D investment and number of new products developed
4) Customer - to achieve our vision how should we appear to our customers (customer loyalty,satisfaction levels, meeting customer needs)
