BST Flashcards
Barriers to entry
Economies of scale Brand loyalty Capital requirements Access to distribution Patents Government subsidies
What makes a market attractive to new entrants?
High industry growth
High profit margins
Few existing competitors
Easy customer switching
Ansoff Matrix
Market penetration- more sales of existing product in existing market
Product development- Develop new product in existing market
Market development- fund new market for existing product
Diversification- new product and new market
Gearing ratio
Marketing strategy using the 4ps model
Price
Product
Place
Promotion
Swot analysis
Strengths - internal
Weaknesses - internal
Opportunities - external
Threats - external
EVALTUATE OPTIONS
Scenario planning
Provides long term view of strategy where key factors may influence success
Choices when industry changes occur:
Do nothing
Make short term forecasts
Use scenario planning to consider substantial shifts in the industry and its environment
Scenario planning involves looking 5-10 years down the like and asking ‘what if?’ And ‘what is the effect of?’ To determine how it can achieve a sustainable business model for the future
Allows earlier response to changes than competitors
Charities
Charities are a Not for Profit (NFP), organisation.
The Nolan principles set out 7 standards for public sector governance:
Selflessness Integrity Objectivity Accountability Openness Honesty Leadership
Governance = the trustees’ role in directing the charity in the long term
Main governance issues:
Stakeholders and public interest - balance conflicting interests.
Financial solvency - ensure sufficient funds to cover costs and provide services. Maximum benefit from limited resources.
Accountability and openness- proper stewardship of public finds, give reasons for the use of funds, be open to scrutiny.
Actions/interests of the board - decisions made in line with interests of charity and its beneficiaries - NEVER for financial gain.
Composition of the board - Are board members confident to challenge each other? A succession plan should be held to replace board members with strong candidates as and when needed
Risk management - battling events that would prevent a charity from carrying out its mission e.g. changes in gvt or policies. Risk should be managed, not always avoided
Conclusion
Non-financial performance measurement
Balanced scorecard approach -looks at 4 perspectives to provide operational control so that the organisation’s mission and objectives are met:
Financial
Measures economy and efficiency I.e. how limited resources are used to the greatest possible effect to add value to beneficiaries and fund providers
Customer -
How users feel about the services provided and the research conducted
Internal business process perspective -
What must the business excel at to achieve its financial and customer objectives e.g. number of marketing or fundraising events held, ratio of paid staff to volunteers
Learning and growth -
Business’ capacity to maintain and grow its position through development of new skills and services
Challenges to implementing change
Cultural barriers:
Structural inertia- cumulative effect of embedded systems and procedures.
Group inertia- changes to norms and skills needed.
Power structures- decision makers fear they will lose power.
Solution: Lewin argues: Unfreeze- challenge existing behaviour Move- make changes Refreeze- consolidate new system e.g. communicate the benefits obtained by new system
Personal barriers:
Habit, security, effect on earnings, fear of unknown, selective information processing, psychological contract
Solution:
Effective communication strategy,
Transparency, eduction on benefits, rewards for embracing change
If a question asks you to give a report :
Structure it like an email with a to, from l, date, and subject headerbat the top of the answer
Marketing strategy
Segmentation- identifying characteristics of different market segments.
Targeting- evaluating and selecting the most attractive segments.
Positioning- developing detailed marketing mix for each segment.
4 P’s of Marketing Mix
People
Product
Place
Promotion
Value chain analysis
Primary activities to comment on: Inbound logistics Operations Outbound logistics Marketing and sales Services
Supporting activities: Infrastructure Technology development HR management Procurement.
Also comment on -
Cost drivers: factor causing costs.
Value drivers: biggest sources of value that differentiate a product or service from its competition
Cyber security risks
Types of slcyber attack: Denial of service- website hacked and shutdown so it cannot be used by staff or customers. Ransomeware Virus attack Phishing of customer data/fraud
Cyber security breaches can result in:
Loss of brand reputation
Loss of customer confidence
Reduction of sales amidst security fears
Customers expect businesses to have sufficient cyber security
Insufficient security could result in litigation and/or legal cases
Safeguards:
Protect integrity of systems
Safeguard information
Ensure business continuity plan in even of a crisis
Have backup servers
Ensure syestms are regularly updated and tested
Transfer risk by outsourcing cyber security to a specialist provider or getting specific cyber insurance
Data encryption
Firewalls
Payment verification software
Employ specialised cyber security staff
Porters 5 forces
Power of customers
Power of suppliers
Competitive rivalry
Threat of new entrants
Threat of substitutes (products not competitors)
