SAC 4/1 - the need for change

Question 1

The concept of business change

Answer 1

The adoption of a new idea or behaviour resulting in a difference in the form or operation of a business over time. Change happens because businesses have pressures that they need to adapt to, pressures can come from inside or outside the business.

Question 2

example of business change

Answer 2

Twitter: according to the new York times, twitter currently has under 2000 employees, this is down from 7500 before Elon musk purchase.

Question 3

reactive change

Answer 3

where the business is impacted by pressures from the business environments and then responds as a result.

Question 4

types of reactive change

Answer 4

• crisis management
• being flexible
• reacting to competitors

Question 5

crisis management

Answer 5

Being faced with a crisis and implementing strategies to overcome the issues the business is faced with

Question 6

being flexible

Answer 6

leaders must be ready to shift strategies, relocate resources, or modify products or services in response to changes

Question 7

reacting to competitors

Answer 7

a competitor may implement a strategy that impacts the business and the leaders need to implement change in response

Question 8

example of reactive change

Answer 8

• ingredients are costing the business more as well as increased cost of living pressures reducing sales
• earnings are expected to drop by approx. 20%
• as a result, dominos are closing approx. 100 stores, postponed, expansion into Denmark and released new affordable products and such as my domino box
• changes are expected to save dom 53 million-59

Question 9

proactive change

Answer 9

initiating change rather than simply reacting to events.
- allows business to be more in control rather than reacting all of the time.
- using KPI’s to identify problems before they occur, than ensuring that appropriate policies are put in place as follow-up.

Question 10

types of proactive grades

Answer 10

• conducting regular market research
• encouraging innovation
• strategic planning
• identifying potential issues early

Question 11

conducting regular market research

Answer 11

by staying informed about trends and changes in the market

Question 12

encouraging innovation

Answer 12

encourage employees to come up with new ideas can lead to improvements in products, services or processes

Question 13

strategic planning

Answer 13

businesses should have long -term strategic plans that consider potential future chnages

Question 14

identifying potential issues early

Answer 14

monitoring KPI’s and implementing changes before there is a larger concern

Question 15

example of proactive change

Answer 15

microsoft, invested 11 billion to open AI, which included an initial investment 1 billion in 2019, to a further 10 billion investment 2023
- this helped microsoft build best in class platforms and provide services that drive productivity and competitors
- the partnership with open AI has potential opportunities to take search market share away from its dominent competitor, google
- opportunity to integrate open AI technology into tools and applications for microsoft major customers, potentially driving strong growth

Question 16

internal forces

Answer 16

(we have control)
Strengths - something that we can do very well today that could help
be a gain with skills, resources and knowledge already in place.
Weaknesses - areas that are holding us back that should be removed
or improved upon with the right energy and effort

Question 17

external forces

Answer 17

we do not have control)
Opportunities - positive potential areas to invest in or pursue, like
technology, relaxing regulations, elimination of trade barriers or
changing consumer preferences
Threats - negative factors such as the emergence of new regulations, increased
trade barriers or supply chain disruption.

Question 18

SWOT analysis

Answer 18

Gathering information to determine the strengths, weaknesses, opportunities and threats of each strategy in order to decide whether it should be implemented and how effective it will be.

Question 19

buyer power

Answer 19

the fewer buyers (businesses) in a market, the more power they have over suppliers to negotiate lower prices and/or better quality inputs

Question 20

supplier power

Answer 20

the fewer suppliers and the more unique the product, the more power the supplier has to dominate over the business

Question 21

competetive rivalry

Answer 21

if customers are easily able to find an alternative product from another business, it is more difficult for a business to compete on the product itself

Question 22

threat of submission

Answer 22

the more competitors (businesses) in a market, the more difficult it is for a business to gain a competitive advantage, therefore the uniqueness of a product becomes more important

Question 23

threat of new entry

Answer 23

power within an industry depends on the cost and ease of entry into a market. The easier it is to enter the industry the lower the power of a business to remain competitive