Chapter 4 - Business structure and performance management Flashcards
What is a joint venture?
A separate business entity whose shares are owned by two or more business entities.
What are three reasons to form a joint venture?
- Gain knowledge, skills and experiance to create new products
- Share costs/risks/resources
- Flexibility
What are three planning difficulties associated with joint ventures?
- Difficult to agree on common goals
- Difficult to agree on how to share resources
- Practicality of planning due to each entity may be in different location
What are three Performance measurement difficulties associated with Joint Ventures?
- Different measurements systems
- Unwilling to share information
- Different opinions on measurement methods
What is a Control difficulty associated with Joint ventures?
- Accountability needs to be set at outset
What is a strategic alliance?
Similar to a JV but a separate business entity is not formed.
What is an advantage of a strategic alliance over a Joint venture?
Greater flexibility since it is not constrained by the reporting and compliance requirements of a separate legal entity.
What are some additional problems associated with a strategic alliance?
- Independence is retained, making the establishment of common goals and information collection more difficult.
- Security of information may be more of a concern due the lack of a separate legal entity.
- Does not have the other benefits that a separate legal entity may have.
What are four benefits of supply chain partners?
- Harnessing the knowledge and skills of the various partners
- Build positive relationship on joint quest to reduce cost
- Work together to meet customer needs gaining competitive advantage
- Reduce reliance on small number of suppliers
What are four challenges of supply chain partners?
- Can be difficult to manage a complex supply chain
- Each partnert will have own goals, these may not be aligned
- Skills are required to manage the relationship
- Measuring performance may be hard
What are the five characteristics of services?
Intangibility
Hetrogeneity - Service required
Similtaneity
Perishability - No stock
No transfer of onwership
What is business integration?
All aspects of the business must be aligned to secure the most efficient use of the organisation’s resources and achieve objectives
What are the two frameworks for understanding integrated processes?
- Porter’s value chain model.
- McKinsey’s 7S model.
What does Porters value chain focus on?
Activities rather than functional departments
What are porters primary value activities?
- Inbound logistics
- Operations
- Outbound logistics
- Marketing and sales
- Service
What are porters secondary value activities?
- Firm infrastructure
- Human resource management
- Technology development
- Procurement
Give a description and example of the below
Inbound logistics
Receiving, storing and handling raw material inputs
A just-in-time stock system could give a cost advantage
Give a description and example of the below
Operations
Transformation of raw materials into finished goods and services
Using skilled craftsmen could give a quality advantage
Give a description and example of the below
Outbound logistics
Storing, distributing and delivering finished goods to customers
Outsourcing activities could give a cost advantage
Give a description and example of the below
Marketing and sales
Market research and the marketing mix (product, price, place, promotion)
Sponsorship of a sports celebrity could enhance the image of a product
Give a description and example of the below
After sales service
All activities that occur after the point of sale, such as installation, training and repair
A flexible approach to customer returns could enhance a quality image
Give a description and example of the below
Firm infrastructure
How the firm is organised
Centralised buying could result in cost savings due to bulk discounts
Give a description and example of the below
Technology development
How the firm uses technology
Modern computer-controlled machinery gives greater flexibility to tailor products to meet customer specifications
Give a description and example of the below
Human resource management
How people contribute to competitive advantage
Employing expert buyers could enable a supermarket to purchase better wine than their competitors
