Questions Flashcards
What is benchmarking, and the three types?
Internal, external, best in class/generic
What are KPIs and CSFs?
KPI: Measure of perforamnce against CSFs
CSFs: What the company must excel at to be successful in the market
Benefits and risks of franchising:
Benefits
Rapid expansion and increasing market share with relatively little equity capital of its own
Franchisor has low financial risk
Economies of scale are quickly available to the franchisor
Income stream as well as initial capital
Can adopt a brand name, trading format and product specification that have been tested and
practised, marketing and training
Often additional help and training from the franchisor
Drawbacks
There can be a clash between local needs or market opportunities and the strategy of the
franchisor
The most successful franchisees may break away and set up as independents, thereby becoming
competitors
Franchisor will seek to maintain some control or influence over quality and service
Payment of royalties
Benefits and drawbacks of JV
Benefits
They permit coverage of a larger number of countries since each one requires less investment
They can reduce the risk of government intervention
} A joint venture with an indigenous firm provides local knowledge
They provide funds for expensive technology and research projects
Core competences, which are not available in one entity can be accessed from the other
Drawbacks
Major conflicts of interest over profit shares, amounts invested, the management of the
joint venture, and the marketing strategy etc.
Problems in each party protecting intellectual property (not sharing)
Danger that a partner may seek to leave joint venture if its priorities change (e.g.
shortage of funds) or it is acquired by another firm
Lack of management interest: The JV will be seen as a secondment outside of the main career
hierarchy of the parent firms
Give examples of a flexible structure
Flat stsructure (entrep), core of essential workers with fringe of external providers (Handy’s), outsourcing, ‘subcontracting’ work to customers, leasing equipment, service and info sharing
Ways of controlling sustainability and quality
Sust: SLAs, DD on suppliers, origins of products
Quality: review QC processes, check IT systems, perform risk assessment
