Organization and performance Flashcards
creative thinking in the business context
identifying a porblem the consumer is not even aware of yet and finding a way to solve that problem
what are the possible steps that could be followed during a problem-solving process?
- identify the resource gap and obtain these resources
- explain the impact on the business and consider different solutions
- choose the best solution(s) and explain it in breadth AND depth
what are the problem-solving techniques that are used to identify strategies to improve the overall performance of the business
- pros and cons chart
- decision tree
- value chain analysis
- PESTLE
- SWOT analysis
- Delphi technique
- resource-based approach
- balance score card.
Pros and Cons chart
Introduce a new product onto the market
pros
-increase the variety of product
-could open a new market
cons
-need more capital
-could not take off
re-launch an existing product
pros
- already have a market
-could add a different flavor
cons
- could not make a big difference
-very expensive-advertising
delphi technique
Used as a method to obtain the opinions of experts on a particular topic, without necessarily engaging with them face to face.
Strategies/plans of action on how a business can respond to challenges to create the business’ competitive advantage
strategic management =
- top management analyses events that take place
-the decisions and actions that are taken in response to the analysis
trend vs crisis?
Some of the events may be something that develops over time (trend), while other events may come as a surprise (crisis) to the business
TO FORMULATE AND IMPLEMENT A SUCCESSFUL STRATEGIC PLAN OF
ACTION, MANAGEMENT NEEDS …
… see slide on the google classroom
Formal Business Strategies
-generic strategy
-corporate strategy
-integration strategy
name the other formal strategies
-Revised business mission
-TQM
- financial ratios
- continuous skills development
- allocate resources differently
-benchmarking
- appraisals
-teamwork
generic strategy consists of:
-low cost
-focus/niche
-differentiation
Corporate Strategy
Corporate combination
Decline/ Defensive
Growth
Integration strategies
forward integration
backward integration
horizontal integration
LOW COST STRATEGY
Competitive advantage created by a low cost is based on having the lowest cost in the industry. In order to achieve this, the workforce as to be committed to saving costs
low cost can be achieved if
-The business has access to cheap raw materials (i.e. low input costs)
-Costs can be reduced through efficiency, using mass production, technology, and Re-engineering activities (i.e. low cost manufacturing)
FOCUS (NICHE MARKET)
Using a focus strategy to develop a competitive advantage means all efforts are aimed at a specific market segment based on geography, culture, age, hobbies or any other criteria that created a unique group of customers in the market.
DIFFERENTIATION
All efforts are aimed at providing a unique product/ service which will ensure customer loyalty, as this may give the business the opportunity to charge a premium price.
differentiation . The uniqueness may be based on factors such as:
- quality (real or perceived per brand name,fashion, image)
- after-sales support product features
- distribution or marketing efforts
name the types of Corporate combinations
joint venture
merger
takeover
joint venture
A joint venture takes place where two or more businesses enter into an agreement to combine resources in order to improve the functioning of both businesses
merger
When two or more businesses merge or when. The Competition Board has to approve a merger/ takeover in order to ensure fair competition continues in the industry after the merger/takeover.
TAKEOVER
A takeover occurs, the individual businesses
no longer exist separately; the different
businesses combine to form one new business.
name the types of Decline/ Defensive
strategies
liquidation
retrenchment
divestiture
liquidation
All assets are sold and the business ceases to exist
retrenchment
It reduces the size of the business or reduces the diversity of products/ service sold
divestiture
The business selling of some of its unprofitable
growth strategies
see business strategies notes
Forward Integration
The business takeover over one of its distributors in order to eliminate the middle man
Backward Integration
A company purchases or controls its suppliers or supply chain.
Horizontal Integration
One company acquires or merges with another that operates atthe same level in an industry.
Revise Business Mission
Already stated is the mission statement. It is a description of what the business does or the purpose the business serves. In the fast changing world that we live in, no business can afford to “wait and see” what the future will bring.
Allocate Resources
Resources in the business refers to the employees, money, machines, time, raw materials and even skills. Resources that are allocated to a task that does not add value that task has to either be outsourced or terminated.
Performance appraisal
A Performance appraisal is a tool used to plan, evaluate and improve the performance of employees. Employees set targets and are evaluated on their ability to achieve targets set.
Continuous Skills Development
Without on-going development of employees’ skills, the business will be in serious trouble. Just think how fast things are changing around us. New technology, changes in legislation, new products from competitors or changes in customer demand, all necessitate the staff acquiring new skills.
Financial Ratios
Solvency, profitably and solvency are indicators which can be used to devise a strategy to improve the function of the business.
Team work
Teamwork generates new ideas to improve Team members may mentor one another or off ideas. Simply provide a soundboard for bouncing
Benchmarking
Benchmarking is when the business looks at what is “best practice” in the industry. This involves measuring the business’ current performance with the standard it should be achieving (best practice). If the business is underperforming, steps are implemented to narrow or eliminate this underperformance gap (between how it is being done and how it should be done.
TQM
Total quality management(TQM) is the continual process of detecting and reducing or eliminating errors in manufacturing, streamlining supply chain management, improving the customer experience, and ensuring that employees are up to speed with training.
