Business models and thories Flashcards
Give 10 models and theories and a small description of them relating to strategy and decision making
SWOT Analysis – Strengths, Weaknesses, Opportunities, Threats
PESTLE Analysis – Political, Economic, Social, Technological, Legal, Environmental
Porter’s Five Forces – Competitive rivalry, threat of new entrants, supplier power, buyer power, threat of substitutes
Ansoff’s Matrix – Market penetration, market development, product development, diversification
Porter’s Generic Strategies – Cost leadership, differentiation, focus
Bowman’s Strategic Clock – Strategic positioning for competitive advantage
Investment Appraisal Methods – Payback period, Net Present Value (NPV), Average Rate of Return (ARR)
Decision Trees – Probability-based decision-making
Critical Path Analysis (CPA) – Managing complex projects efficiently
The Experience Curve – More experience = lower costs & higher efficiency
5 marketing models
The Marketing Mix (4Ps & 7Ps) – Product, Price, Place, Promotion (+ People, Process, Physical Evidence)
Product Life Cycle – Introduction, Growth, Maturity, Decline
Boston Matrix – Stars, Cash Cows, Question Marks, Dogs
Market Segmentation, Targeting & Positioning (STP) – How businesses select and reach target customers
Price Elasticity of Demand (PED) & Income Elasticity of Demand (YED) – Sensitivity of demand to price/income changes
7 operations management models
Lean Production – Minimizing waste, maximizing efficiency
Kaizen (Continuous Improvement) – Small, continuous improvements
Just-In-Time (JIT) Production – Reducing stock holding to lower costs
Economies of Scale – How larger businesses reduce average costs
Capacity Utilization – Relationship between output & max potential output
Quality Management – Total Quality Management (TQM), Quality Assurance (QA), Quality Control (QC)
The Greiner Growth Model – Business growth stages & challenges
6 financial models
Break-Even Analysis – Understanding fixed costs, variable costs & contribution
Investment Appraisal – Payback Period, Net Present Value (NPV), Average Rate of Return (ARR)
Ratio Analysis – Gross Profit Margin, Net Profit Margin, ROCE, Current Ratio, Gearing Ratio
Elkington’s Triple Bottom Line – Profit, People, Planet (Sustainability)
Carroll’s CSR Pyramid – Economic, Legal, Ethical, Philanthropic Responsibilities
Balanced Scorecard Model (Kaplan & Norton) – Financial & non-financial performance measures
9 Human resources and leadership models
Maslow’s Hierarchy of Needs – Psychological to self-actualization needs
Herzberg’s Two-Factor Theory – Motivators & Hygiene factors
Hackman & Oldham’s Job Design Model – How job design affects motivation
Taylor’s Scientific Management – Pay-based motivation
Mayo’s Human Relations Theory – Importance of teamwork & social factors
Blake Mouton Grid – Leadership styles based on concern for people & production
Tannenbaum Schmidt Continuum – Leadership ranging from autocratic to democratic
Kotter & Schlesinger’s Resistance to Change Model – Reasons for resistance & overcoming it
Lewin’s Change Management Model – Unfreeze, Change, Refreeze
2 models linking to stakeholders
Corporate Social Responsibility (CSR) Models – Stakeholder vs Shareholder approach
Mendelow’s Stakeholder Matrix – Power vs Interest of stakeholders
What is the far right part and far left part of Tannenbaum Schmidt Continuum
- Area of freedom for subordinates
- Use of authority by managers
What are the 4 sections of the Tannenbaum Schmidt Continuum
Tells, Sells, consults, joins
when can you use the Tannenbaum Schmidt Continuum
When discussing the influences on and impact of different management and leadership styles
you might want to consider:
- the advantages and disadvantages of each approach
- the factors that determine what style is adopted by a manager/leader
- when a given style might be appropriate eg you might consider how different styles might
be appropriate in different situations or when making different types of change.
5 sections of blake mounton grid
High concern for people, high concern for the task - Team leader
low concern for people, high concern for the task - Produce or perish
High concern for people, low concern for the task - Country club
Low concern for people, low concern for the task - Impoverished
When can you use blake mounton grid
When discussing the influences on and impact on different management and leadership
styles you might want to consider:
- the advantages and disadvantages of each approach
- the factors that determine what style is adopted by a manager/leader.
What are the stages of scientific decision making and an overview
- Set objectives
- Gather data
- Analyse data
- Select
- Implement
- Review
- A model that highlights the different stages in a scientific, data based approach to decision
making. It outlines a logical sequential process.
What are the shapes needed to draw a tree diagram and what do they mean
- A square represents that a decision has to be made.
- The lines coming from the square represent the possible choices.
- The circles show that there are outcomes as a result of a choice.
- The lines coming from a circle show the expected outcomes.
What are the sections of stakeholder mapping
High power, high interest - Manage closely
High power, low interest - Keep satisfied
low power, high interest - Keep informed
Low power, low interest - Monitor (min effort)
When can I use stakeholder mapping
When discussing the power and influence of stakeholders, how stakeholders may affect
decision making and how managers may treat different groups you might want to consider:
- the factors that affect the power and influence of different stakeholder
groups - how a business might treat different groups according to their power and interest (eg
how much information they provide) - how stakeholders might increase their power (eg employees coming together in a trade
union).
What influences the price elasticity of demand
Demand is likely to be more price inelastic if:
- the product is heavily branded so customers are not especially sensitive to price
changes - there are few substitutes
- a relatively low proportion of income is spent on this product so customers are
less sensitive to a price change - someone else is paying so customers are less sensitive to a price change because it
does not affect them directly - in the short-term customers may not find it easy to find alternatives; over time they
have longer to find alternatives and demand will be more price elastic.
What are the marketing process
- Segmentation
- targeting
- Positioning
When can you use marketing process
When you can use this:
When discussing market analysis and making marketing decisions you could consider:
- how markets are segmented
- what makes a segment attractive to a business
- why a business might target relatively few or
many segments - how a business might decide to position its products (this links with market mapping)
- the nature of the marketing mix because this must link back to the target market and
positioning of the product.
key points for market mapping
Key points
Managers must:
- analyse a market to identify the segments that exist
- select which segments they think the business should target (depending on eg
relative strengths) - decide where in the targeted markets the products should be positioned relative
to competitors.
7Ps of marketing mix
- Process
- Product
- Promotion
- Price
- Place
- People
- Physical environment
What are the sections of the boston matrix
Low market share, low market growth - dogs
High market share, low market growth - Cash cows
Low market share, high market growth - Problem child
High market share, high market growth - Stars
What actions should be takes if a business has a dog
Managers may need to revive these dogs or stop producing them
What actions should be takes if a business has a cash cows
These are well established products, which mean they will be generating revenue
but may not need heavy investment to promote.
- Managers may say ‘milk’ these products, ie use the money they generate to finance
other products.
What actions should be takes if a business has a problem child
- The market is attractive as it is growing but this product is not well established.
- Managers may invest in these products to help promote and distribute them. These
products may provide significant income in the future (assuming they thrive).
What actions should be takes if a business has a stars
These products are doing well in fast growth markets.
- They may need some investment to support them and maintain market share;
these funds may come from the cash cows.
What are the different sections of the product life cycle
Development: this is what happens as the product idea is turned into a reality. Money
will be invested developing, testing and trialling products. Many product ideas will never
actually make it to launch. This is a time when there are likely to be relatively high
outflows with no money coming in yet.
- Launch: this is when the product is put on to the market. It may take time to get
distributors and for the product and brand to develop. - Growth: this is when sales are growing fast as the product becomes better known and
distribution increases. - Maturity: sale growth now slows and the business will start to look ahead and decide
what action to take. - Decline: this is where sales fall.
