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BU111 > Key Success Factors > Flashcards

Key Success Factors Flashcards

1
Q

What are the 6 KSF

A
  1. Financial resources
  2. Customers
  3. Employees
  4. Products and services
  5. Innovation
  6. Uniqueness
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2
Q

KSF day to day what does the business need to think about

A
  • Guide strategic and daily actions
  • Ensure success over time
  • Ensure holistic thinking- every failure in one area, affects the others in some way
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3
Q

Financial Resources

What are they?

A

the money that a company earns, possesses or is able to obtain

  • having sufficient cash flow and being profitable so operation can continue
  • doing as well as competitors in terms of ROI
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4
Q

Financial resources

why are they important

A

o Without financial performance, organizations can not pay for activities and won’ t be able to stay open
o if less profitable than competitors, it’s difficult to attract financial resources because it’s a less attractive investment
o Achieving financial performance means being Comparatively better and improving profit and return on investment

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5
Q

Financial resources

what actions can you take to achieve them?

A

o Companies create financial performance through wise and well-implemented strategic decisions
o effective and efficient operations

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6
Q

Financial resources and employees

A

•if a company has more money, they can provide employees with higher wages, benefits, bonuses, etc. This ensures happy employees that are committed and motivated to work

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7
Q

Financial resources and customers

A
  • More money = more investment in market research to better understand customer needs
  • Attract more customers through advertising
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8
Q

financial resources and products and services

A
  • Better quality products mean less returns and more people wanting to buy your products
  • Invest in technology to standardize production process and test the quality
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9
Q

financial resources and innovation

A

• Investments in R&D

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10
Q

financial resources and uniqueness

A
  • If they have more money they are able to do more things and can increase competitive advantage
  • Promotes activities and unique features so the market is aware of its value
  • Acquire resources/ capabilities to be better than competitors
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11
Q

KPI financial resources

A

o Revenues – look at income statement and if there is growth or revenue
 Money generated through sales
o Profit
 Remains after you have paid expenses
o Profit margin
 Understand the ratio of profit to every dollar of sales- the higher the better!
o Growth-
 Revenue, profit and ROI all indicate that the company is continuously getting better and how well it executes strategy and operations.
o ROI- return on investment
 Is the net profit divided by the total investment
o Firm value- if you sold the company today, what would it be worth

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12
Q

Employees

what are they?

A
  • Human resources that work for you (paid/voluntary)

* Execute the organizations daily activities, determines and execute its strategies

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13
Q

employees

why are they important?

A
  • without well-trained, knowledgeable employees, any org will have difficulty operating/successfully navigating the environment
  • the organizations key resource
  • Loyal employees are more likely to be more productive
  • Go beyond job expectations and execute at high-performance levels
  • psychologically and emotionally committed to the company and its success
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14
Q

employees

what actions can you take to achieve them?

A

• employee commitment is fostered through the creation of a positive working environment
o feel respected, valued
o meet their personal goals
1. Hire people that are a good fit
• Skills, knowledge and talent to ensure high performance
• Values, attitudes, work styles match the organization
2. Ensure employee has tools and training
• Motivate the behaviours that contribute to the org performance → identify/reward choice by granting rewards (employees feel valued)
3. Retain employees
• Reward performance
• Offer opportunities to move up/around org, learn, grow

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15
Q

employees and financial resources

A
  • Directly linked to financial performance
  • Committed employees are more productive which reduces operation costs
  • Less money has to go into hiring and training new employees
  • reduces the indirect costs of lower productivity while you search for a replacement and wait for them to achieve maximum effectiveness
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16
Q

employees and products/ services

A
  • affect the quality of work
  • take greater care in their work and do their best to ensure that goods and services being produced free from defects and the best of quality
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17
Q

employees and customers

A
  • more likely to meet customers’ needs

* take personnel pride in customer satisfaction

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18
Q

employees and innovation

A
  • more likely to share innovations, beneficial activates and actions
  • more likely to seek innovation
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19
Q

employees and uniqueness

A

• if you have a unique brand employees will be attracted to your company.

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20
Q

KPI employees

A

• employee retention (dedication) and productivity are key elements of employee commitment
• Turnover applications productivity- 2 KPI of employee commitment
• Turnover- The percent of employees that you have to replace every year indicates low or high employee loyalty
o Companies want a low turnover rate- this reduces training cost and time
o If a company has a high turnover rate- they will not be able to his maximum productivity for a while- since they are spending their revenues on training new employees.
• Productivity
o Low levels means employees are not motivated or they need more training
o Leading indicator that an employee is unsatisfied with the work or organization
 Rate of absenteeism- how many days per year the employee doesn’t come to work when expected.
o The number of applicants you receive for a job is an indication of how attractive your company is for employees  employer brand equity

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21
Q

rate of absenteeism

A

employee KPI

how many days per year the employee doesn’t come to work when expected

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22
Q

number of applicants

A

employee KPI
the number of applicants you receive for a job is an indication of how attractive your company is for employees- employer brand equity

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23
Q

customers

what are they?

A

o Individuals, groups or organizations that consume a particular product or service
 Dividend into segments of similar wants and needs
 Your customers are your target market
o For- profit- customers provide revenue that companies need in order to recover costs and make profit
o Non-profit- reason for the organization forming is to fill the needs of customers

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24
Q

customers

why are they important

A

o Customers validate and generate the company’s value
 Determine company growth
 Determine the perception of the company customer opinion affects the reputation
o If the company does not satisfy needs- they will go to other firms
 Purchase competitors good
 Hard to attract new customers if the company does not have a good reputation
 Sales revenue will decline

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25
Q

what actions can you take

customer satisfaction

A
  1. Decide on target market
    o Who you can serve best that will value what you offer
  2. Understand customer wants
    o Physical aspects or service function
    o Factor in: convenience, appearance, status, comfort, safety
  3. Anticipate customer needs
    o Keep them loyal by identifying future needs/wants
    o Environment is always changing so look ahead
    o Ex. new ice cream flavours, advanced car features etc
  4. Satisfy customer needs/wants
    o Ensure that the customer believes you are delivering what they need/want
    o Make them happier than any other company can
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26
Q

customer and financial performance

A

• How many customers you have, how much they purchase/are willing to pay drives your revenues, impact profitability and financial performance

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27
Q

customer and employee

A

• If the product created does not make the consumers happy, it is more difficult to for employees to have pride in the company don’t want to work for an unvalued company

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28
Q

customer and innovation

A
  • Constantly meeting consumer needs through innovation
  • Customers may have a need, you can create that product with innovation
  • Consumers wants and needs are what inspire/drive product and service innovation
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29
Q

customer and products and services

A

• People are willing to spend more money on quality products or target may be people who do not want to spend a lot of money, they will have less quality products

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30
Q

customer and uniqueness

A
  • If you are known for customer service it sets you apart from competitors
  • Target market has different wants/needs/characteristics from other customer segments – can influence unique aspects of your goods and services that need to be delivered
31
Q

customer KPI

A

market share, share of wallet, churn, net promoter score

32
Q

market share

A

o Market share- percent of the market/ portion of the total market revenues that you earn
 A big market share means that you are satisfying more people (usually bigger companies).
 A smaller market share means that you are not satisfying as many people in the market (usually smaller companies)
 How do you compare to other firms that are the same size

33
Q

share of wallet

A

capture more of the consumers wallet.
 If consumers are spending more money at your company you have a larger share of wallet.
 If you do not have a lot of products you will not have a high share of wallet.
 Percentage of a consumer’s total spending on your type of product

34
Q

churn

A

 Indicates customer loyalty
 companies want low customer churn, as this means you have high customer loyalty.
 high churn means you do not have high customer loyalty and you need to spend a lot of money to try and attract new customers.

35
Q

net promoter score

A

how likely consumers are you to promote/ advocate for you
 Likely to recommended your business to someone else
 High = customers advocate for your products and services

36
Q

what are products and services

A

• What customers receive from you

37
Q

why are products and services important

A
  • Products and services are the mechanism by which you satisfy your customers
  • Reason customers do business with you
  • Product reputation is based on what you produce and the features/qualities (include intangible elements- how they are delivered, post-purchase customer service)
  • Your revenue means
38
Q

products and services

actions you can take to achieve them

A
  1. Define ‘value’
    • Features that describe quality - value includes convenience, form, price, taste
  2. Ensure the expected level of reliability
    • Quality of inputs → higher-quality inputs usually result in better outputs
  3. Ensure consistency
    • Customers want predictability in purchase
    • Structured production and quality control processes allow product and quality consistency
39
Q

products and services and financial performance

A

• Impact on revenues and expenses
• The quality of goods determine the prices that can be charged
o Higher quality products means higher profit margins
• Affects expenses
o Consistent quality comes from continuously improved/standardized processes
o Reduce expenses by reducing the number of defective products and increasing production efficiency to reduce waste

40
Q

products and services and customers

A

• Reputation, features, quality of products influence what and how many customers are attracted to your products

41
Q

products and services and innovation

A

• How you define quality drives innovation focus

-making products and services better is what drives innovation

42
Q

products and services and uniqueness

A
  • Features/quality impact marketplace uniqueness

* Differentiation from competitors

43
Q

product and services and employees

A

• Take pride in their work when creating quality products

44
Q

products and services KPI

A

returns, defects and warranty claims, waste

45
Q

returns

A

did not provide the value you expected
o the percentage of products that are returned
o reflects your performance in creating quality products and services

46
Q

defects and warranty claims

A

lack of consistency, can be in the production or inputs - when the product goes out, then it breaks down you have to fix it at your own cost

47
Q

waste

A

items that you have to throw away
o Reflects the consistency and efficiency of processes (amount of inputs to relative output)
 Proxy for input quality  better quality inputs= less waste

48
Q

innovation

what are they

A
  • A valuable change
  • New approach to existing organizations processes, activities/ strategies
  • Improvements to anything that the organization does
49
Q

innovation

why are they important

A

• the environment (customers, competitors, etc.) is constantly changing- environmental alignment
• to ensure long term survival & org’s success:
o Changing to improve, become more efficient/effective, ensuring the best position within current/future environment, changing to remain aligned with the environment

50
Q

innovation

what actions can you take to achieve them

A
  1. Have a structure that enables ideas/knowledge from outside to be shared with the org
    • Innovative org have different parts of the org connecting and sharing insights → creates new ideas
    • Allows new ideas to be explored rather than bureaucracy rejecting different from org norms
  2. Reward innovation
    • Build innovative culture
    • From public recognition and validation → emotional reward
51
Q

innovation and customers

A

• Innovation identifies new needs or ways to satisfy customers

52
Q

innovation and products and services

A

• New inputs and ways of producing lead to improved consistency, reliability and value (new features)

53
Q

innovation and employees

A

• Find new ways to work and hire employees that improve and fit the job design

54
Q

innovation and financial performance

A
  • Indirectly through effects on other factors

* Directly when identifying new marks or efficient ways to execute strategies  increase revenues and decrease costs

55
Q

innovation and uniqueness

A
  • Constantly creating new products and services is a way to set yourself apart from competitors (apple)
  • Strategy innovation and market approach ensure differentiation from competitors and sustaining competitive advantage
56
Q

innovation KPI

A

idea generation, cycle time. proportion of ideas

57
Q

idea generation

A

an important starting point for innovation
o is an indicator of whether the culture, rewards and or structure encourage ideation
o measuring how many ideas are valuable  important for innovation

58
Q

cycle time

A

indicates if structure and culture is supportive of innovation
o time it takes to think about the idea of the product and get it out to the customer.
o How quickly an idea is adopted

59
Q

proportion of ideas

A

o how much change has occurred within a period of time.

o What proportion of ideas actually result in new ideas/approaches

60
Q

uniqueness

what are they

A
  • Distinctive competitive advantage means being different from competitors strategically and financially valuable
    • ex. products are different from competitors, company performs superiorly in comparison to competitors
61
Q

uniqueness

why are they important

A
  • differentiation is a strategy to charge higher prices rather than compete on the basis of lowest price
  • attracts and retains customers → they believe your products are different
  • attract better applicants → if you offer unique work conditions that appeal to a target employee market
62
Q

uniqueness

what actions can you take

A

understand what competitors are doing, what the market values, develop unique capabilities or acquire resources

63
Q

understand what competitors are doing

A

• Know what everyone else is doing before identifying what can be differentiated

64
Q

understand what the market values

A

• In order to ensure the innovation is advantageous

65
Q

unique capabilities or acquire resources

A
  • Makes you better than competitors at doing something
  • Ex. Apple → innovation and marketing capabilities
  • Rare resources/capabilities that can’t be imitated/acquired easily ensure competitive advantage is harder for competitors to diminish through imitation (minerals, location, HR)
66
Q

uniqueness and financial performance

A
  • Allows companies to earn above normal returns

* Charge higher prices or decrease costs through efficiency

67
Q

uniqueness and customers

A

• More loyal and easier to attract because they believe the company has a higher value compared to competitors

68
Q

uniqueness and employees

A

• More likely to apply and retain employees when the company is viewed as unique/ aligns with interests

69
Q

uniqueness and products/services

A

• Differentiates the business from competitors and reduces the intensity of competition

70
Q

uniqueness and innovation

A
  • Desire to be unique is what drives innovation

* Looking for new/different ways to operate and compete

71
Q

uniqueness KPI

A

market research and financial statements

72
Q

market research

A

whether the company has a strong reputation (known for something specific) combined with being known for doing something different from its competitors- can be confirmed through market research

73
Q

financial statements

A

how you look compared to your competitors

o Quantitative market research

BU111 (5 decks)

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