SAC 1B Flashcards
Five Forces Analysis
Supplier Power
Buyer Power
Competitive Rivalry
Threat of Substation
Threat of New Entry
Supplier Power
The fewer suppliers and the more unique the product is, suppliers have the power to influence price, as well as the availability of resources/inputs.
Buyer Power
The fewer buyers, the more power the buyers have over the suppliers to negotiate lower prices and/or better quality inputs.
Competitive Rivalry
The more competitive a businesses are within the market, it is harder for a business to gain a competitive advantage, therefore making the product more unique and important.
Threat of Substitution
When customers find an alternative product from another business.
Threat of New Entry
When new competitors enter into an industry offering the same products or services, a company’s competitive position will be at risk.
Porter’ Generic Strategies
When businesses are looking for a competitive advantage. Lower Cost and Differentiation.
Lower Cost
This is where a manager decides that the business will aim to become the lowest cost producer of a product. For example introduce new technology to produce products faster with less waste therefore reducing costs. A company has a cost advantage when it can produce a product or provide a service at a lower cost than its competitors.
Differentiation
A business can make their good or service seems to have a unique point of difference from it’s competitions. For example it could be based on the product itself, the delivery or the marketing. Attracts more customers.
SWOT Analysis
Gathering information to decide whether change should be implemented:
Strengths
Weakness
Opportunities
Threats
Force Field Analysis Theory
Weighing
Ranking
Implementing a Response
Evaluating the Response
Weighing
Weighing refers to the value or strength that is assigned to each driving and restraining forces identified. If the value of the driving forces outweighs the value of the restraining then the change is likely to be successful.
Ranking
Rank forces in order of most powerful to least powerful (driving and restraining).
This can create a better understanding of which forces can strengthen or minimise/eliminate.
Implementing a Response
Having an action plan on how to increase the strength of driving forces and reducing the strength of restraining forces.
Evaluating the Response
Once the actions have been implemented a review of the effectiveness of these actings is required, this provides the business with a clear understanding of what the businesses will be faced with if they implement change.
Driving Forces
Owners
Managers
Employees
Innovation
Globalism
Competitors
Legislation
Technology
Pursuit of profit
Reduction of costs
Societal attitudes
Restraining Forces
Managers
Employees
Legislation
Time
Organisational Inertia
Financial Considerations
Steps in Performing a Force Field Analysis
- Define your goal or vision for change
- Identify forces for change (driving forces)
- Identify forces against change (restraining forces)
- Assign scores - score each force according to the degree of influence each one has on the plan, and then add up the scores for each side (for and against)
High Risk Strategies
- Manipulation
- Treat
Manipulation
When a manager or leader doesn’t give all the information to employees to make them agree to a change. This can backfire as it can create less trust within the workplace and employees will want to do the opposite if they find out.
Threat
This is when a leader or manager uses force to the employees to accept a change. This is to insure that the change will take place quickly. For example a manager could say that if they don’t agree with the change it could affect the amount they are paid .
Low Risk Strategies
- Communication
- Empowerment
- Support
- Incentive
Communication
This is when there is a open and honest relationship and conversation that can reduce anxiety for employees.
Empowerment
This when a leader or manager is giving employees power in regards to designing or implementing the change. This can create less resistance when it comes to employees accepting the change because they have a say in how the change will be implemented.
Support
Change may alter an employees job therefore altering training and other services that support employees. Give them time to adjust to the changes to their job.
Incentives
Offering employees special benefits to support the change. This can decrease the amount of resistance towards the change.
Three Step Change Model
Unfreeze, Changing, Refreeze
Unfreeze
Unfreezing is when management should prepare the business for change by analysing driving and restraining forces and communicating the benefits of the change as well as restrictions.
Change
Then changing stage involves the implementation of the change, which involves clear goals. This stage can take time, therefore communication and support are important to create a space that they can embrace the change.
