business aos 1 u4

Question 1

business change

Answer 1

the alteration of behaviours, policies and practices of a business.

Question 2

proactive approach

Answer 2

when a business changes to avoid future problems or take to advantage of an opportunity to gain a competitive advantage.

Question 3

reactive approach

Answer 3

when a business undertakes change in response to a situation or crisis

Question 4

proactive and reactive similarties

Answer 4

Both approaches are utilised by a manager or business to implement change.
*
Both approaches involve the business undertaking change for future benefits, such as growth, progression, and to improve or restore its brand image.

Question 5

proactive differences

Answer 5

Proactive change occurs when a business takes advantage
of an opportunity and avoids future problems.

• Proactive change often involves the use of low-risk strategies.
  *
  Proactive change is more planned, coordinated, and controlled, with fewer pressures acting on the business throughout the change.

Question 6

reactive differences

Answer 6

Reactive change occurs in response to a situation or crisis that is essentially forcing the business to change.

Reactive change usually involves the use of high-risk strategies.

reactive is more spontaneous, urgent and pressured.

Question 7

consequences of poorly management change

Answer 7

• employee resistance
• tension
• stress
• anxiety
• lost productivity
• increase in staff turnover and absenteeism
• non achievement of business objectives

Question 8

qualities for good change management

Answer 8

• risk taking
• strong leadership
• responsive management structures
• managers predicting future trends
• build a shared vision
• strong management skills especially in communication
• provide good support - training and consultation.

Question 9

KPI

Answer 9

are a criteria that measures a business’s efficiency and effectiveness in achieving its different objectives

Question 10

percentage of marketshare

Answer 10

measures the proportion of a business’s sales, compared to the total sales in the industry, expressed as a percentage figure.

Question 11

marketshare - evaluate performance

Answer 11

percentage of market share can** highlight the proportion of customers that a business and its competitors** are able to engage with and therefore shows a business’s impact and success in the market.

Question 12

net profit figures

Answer 12

calculated by subtracting total expenses incurred from total business revenue earned, over a specific period of time

Question 13

net profirt - evaluate performance

Answer 13

A manager could analyse a business’s net profit figures to assess whether expenses are too high or revenue is too low.

Question 14

rate of productivity growth

Answer 14

is the change in the total output produced from the given level of inputs over time, expressed as a percentage figure.

Question 15

growth - evaluate performance

Answer 15

A high level of productivity indicates that a business is capable of producing a high amount of outputs from a minimal number of resources used as inputs.

Question 16

number of sales

Answer 16

the total quantity of goods and services sold by a business over a specific period of time

Question 17

evaluate performance - sales

Answer 17

A business’s financial performance can be measured using number of sales as a KPI, as it indicates how well goods and services are received by customers.

Question 18

number of customer complaints

Answer 18

the number of customers who notified the business of their dissatisfaction over a specific period of time.

Question 19

customer complaints evaluate performance

Answer 19

the number of customer complaints indicates the level of customer satisfaction and engagement with the goods and services they purchase.

Question 20

level of wastage

Answer 20

the amount of inputs and outputs that are discarded during the production process.

Question 21

level of wastage - evaluate performance

Answer 21

High levels of wastage at any stage of the production process is a concern to a business, particularly an operations manager, as it often increases the raw materials, cost, and time required to produce a good or service. a low level of wastage can reflect an extremely efficient and cost-effective production process and a business that values sustainability,
therefore enhancing overall performance

Question 22

force field analysis

Answer 22

is a theoretical model that determines if businesses should proceed with a proposed change.

Question 23

driving forces

Answer 23

factors affecting the business environment that promote and support business change

Question 24

restraining forces

Answer 24

factors that resist a business change or actively try to stop it.

Question 25

weighting

Answer 25

is the process of scoring and attributing a value to the driving and restraining

Question 26

ranking

Answer 26

involves arranging the forces in order of value and determining the total score of driving and restraining forces.

Question 27

Force field analysis process

Answer 27

1. give weighting to current driving and retraining forces
2. rank the top restraining and driving forces to eliminate or stregnthen them
3. list actions required and implement a response
4. evaluate the response (implement strategies to manage these strategies and enable changes via an action plan)

Question 28

strengths force field analysis

Answer 28

1. businesses can examine if a proposed change can be successfully
2. business can save time by promoting the main driving forces and limiting the main restraining forces
3. takes the whole business environment when implementing change, hence a more well informed change can be made.

Question 29

disadvantages force field analysis

Answer 29

1. can be time consuming, especially if a business is already aware of the mandatory change. eg. a change is required for legislation.
2. conducting the analysis will require business resources at a cost to the business.

Question 30

external enviroment

Answer 30

relates to the surrounding factors that the business has little to no control over.

Question 31

internal enviroment

Answer 31

relates to the factors affecting a business, which the business has some control over

Question 32

ROI

Answer 32

What the owner gains financially from the business compared to the sum they invested.

Question 33

how do managers drive change

Answer 33

• job security - may be in contract to initiate change or if owner desires change then the manager may achieve it for them or be at risk of their employment.
• financial benefit - financial incentive in contract if they achieve success in change (eg. shares as a part of their renumeration)
• personal reputation - successful change can build personal status (put on resumes)

Question 34

how does pursuit of profit drive change

Answer 34

if profit levels are insufficient to satisfy business and shareholder objectives it will drive management to introduce change to either increase revenue or cut costs

Question 35

globalisation

Answer 35

the process by which governments, businesses and people across the globe are becoming more interconnected, allowing for increased international trade and cultural exchange.

Question 36

how does globalisation drive change

Answer 36

creates opportunities such as access to more markets and reducing costs by accessing cheaper labour for manufacturing.

Question 37

technology

Answer 37

the application of scientific knowledge to invent new devices, tools, systems or processes

Question 38

how does technology drive change

Answer 38

allows the business to improve efficiency and effectiveness of operations, cuts costs and improves productivity,

Question 39

societal attitudes

Answer 39

the collective values, beliefs and views of the general public

Question 40

how does societal attitudes drive change

Answer 40

• business practices should align with societal attitudes and behaviours in order to maintain popularity
  
  • environment
  • social media

Question 41

how can employees can restrain change

Answer 41

Employees can restrain change if they:

• fear the unknown,
• might not have the skills required
• fear for their job security, or
• fail to see a reason to change.

Question 42

how can time restrain change

Answer 42

poor planning or reacting too late to a situation or crisis. Industry conditions are changing rapidly, time can be scarce.

Question 43

how can organisational intertia restrain change

Answer 43

• resource rigidity - unwillingness to invest in change
• routine rigidity - inability to move away from the comfort zone
• success of business - may find change risky

Question 44

organisation inertia

Answer 44

the tendency for a business to maintain established ways of operating.

Question 45

legislation restrain change

Answer 45

Legislation can sometimes make it hard for businesses to change in the way they may want to.

Question 46

how can financial considerations restrain change

Answer 46

change might result in purchasing new technology, redundancy payments, training or redesigning.

Question 47

porters generic strategies

Answer 47

a strategic mangement theory that describes how a business can seek to acquire a compeititive advantage in its industry. Proactive apporach

Question 48

how to determine what strategy porters

Answer 48

• analyse the competitive forces
• determine what businesses strengths are
• compare the strengths to competitive forces
• decide most appropriate strategy.

Question 49

competitive forces

Answer 49

Supplier power (how easy it is for suppliers to drive up costs)
○ Buyer power (how easy it is for buyers to drive down costs)
○ Competitive rivalry (the number and capability of competitors)
○ The threat of substitution (how easily similar goods can be
found)
○ The threat of new entry (how easy it is for new competitors to
enter the market)

Question 50

porters low cost strategy

Answer 50

involves a business offering customers similar or lower priced products compared to the industry average, while remaining profitable by achieving the lowest cost of operations among competitors.

Question 51

competitive advantage

Answer 51

the conditions/attributes that place a business in a superior position compared to its immediate competitors

Question 52

cost conscious customers

Answer 52

purchase goods or services primarily based on price.

Question 53

profit margin

Answer 53

calculates and expresses the profitability of a business.

Question 54

profitability

Answer 54

measures the profit of a business relative to the size of its revenue

Question 55

Three pricing approaches of porters lower cost strategy:

Answer 55

changing similar prices to competitors
charge lower prices than competitors

Question 56

businesses can achieve porters lower cost strategy by

Answer 56

• achieving economies of scale
• implementing technology
• preferential access to raw materials.

Question 57

lower costs - reduce operating costs

Answer 57

• minimising labour costs
• implementing lean production strategies
• renegotiate employment contracts

Question 58

control supply chain

Answer 58

• review materials management strategy (just in time)
• strive to use economies of scale
• buy raw materials from lowest cost sources

Question 59

using assets efficienty - low cost strat

Answer 59

• implementing new technology to produce quicker and cheaper
• offer high volumes of standardised goods.

Question 60

porters lower cost strategy strengths

Answer 60

• attractive to cost conscious customers
• business operations are optimised and must remain efficient to maintain low costs of production
• creates barriers to entry for new competitors as it is often challenging for them to match lower prices whilst simultaneously reducing the costs of operations and still remaining profitable.

Question 61

porters lower cost strategy limiations

Answer 61

• Standardised or basic products may not meet the needs of customers who have specific needs.
• Customers are not loyal to particular brands. If another business were to offer a cheaper alternative, these customers would likely switch to the new business immediately.
• Low prices may result in customer perceptions that the good or service is of lower quality.

Question 62

porters differentiation strategy

Answer 62

involves offering customers unique services or product features that are of perceived value to customers, which can then be sold at a higher price than competitors.

Question 63

percieved value

Answer 63

is a customer’s opinion on the benefits they receive when they purchase a good or service.

Question 64

point of differentiation

Answer 64

is the unique selling features or elements that positively distinguish a business’s good or service from its competitors.

Question 65

a business can create a point of differentiation for its products by

Answer 65

• innovation
• new features
• relationships/ambassadors
• patents that protect IP
• warranties
• distribution
• marketing approach that clearly seperates

Question 66

strengths differentiation

Answer 66

• improve connection to customer and develops loyalty
• businesses can make revenue gains if they can charge premium prices
• increased market share through loyalty

Question 67

weaknesses differentiation

Answer 67

• can be difficult to prevent competitors from replicating points of differentiation
• new employees may require additional training to adapt their skills to match the business’s points of difference
• higher investments of time and money may be required such as on research to develop innovative products or improve service levels of employees