U4 AOS1 bus man Flashcards
business change
any alteration in the operation of the business that sees the business transition and create a new state of operation
reactive change
is to wait for change to occur and then respond to it
proactive change
is to initiate change rather than simply reacting to events
key performance indicator (definition)
is a set of criteria that helps business owners understand how their business is performing in a certain area in order to achieve business objectives
key performance indicators (9)
- percentage of market share
- net profit figures
- rate of productivity growth
- number of sales/revenue
- rates of staff absenteeism
- level of staff turnover
- level of wastage
- number of customer complaints
- number of workplace accidents
MPP SAT CAW
- percentage of market share
- net profit figures
- rate of productivity growth
- number of sales/revenue
- rates of staff absenteeism
- level of staff turnover
- level of wastage
- number of customer complaints
- number of workplace accidents
percentage of market share
represents the % of an industry sales that is earned by a particular business over a specified time period (increase = good for business)
net profit figures
is what the company has earned after all expenses are deducted from total revenue (increase = good for business)
rate of productivity growth
is the % increase in productivity over time (increase = good for business)
number of sales/revenue
refers to the measure of the quantity of goods/services sold in a given reporting period (increase = good for business)
rates of staff absenteeism
is the number of days employees are absent from work as a % of their total number of working days (decrease = good for business)
level of staff turnover
is the amount of employees leaving the business in a period of time and need to be replaced (decrease = good for business)
level of wastage
the amount of stock either as a raw material or during processing which is discarded (decrease = good for business)
number of customer complaints
the amount of written/verbal expressions of dissatisfaction from customers about an organisation’s goods/services over a period of time (decrease = good for business)
number of workplace accidents
the recorded amount of worker/ customer related injuries that occur in a business in a given time period (decrease = good for business)
key principles of the Force Field Analysis theory (Lewin)
- driving forces
- restraining forces
driving forces (definition)
factors that encourage a change to occur
restraining forces (definition)
factors that work against the change and provide resistance
driving forces (10)
- managers
- employees
- competitors
- legislation
- pursuit of profit
- reduction of costs
- globalisation
- technology
- innovation
- societal attitudes
managers (DF)
employees (DF)
competitors
legislation (DF)
pursuit of profit
reduction of costs
globalisation
technology
innovation
societal attitudes
restraining forces (6)
- managers
- employees
- time
- organisational inertia
- legislation
- financial considerations
managers (RF)
employees (RF)
time
organisational inertia
legislation (RF)
financial considerations
Porter’s Generic Strategies
is a strategic management theory which describes how a business can seek to acquire a competitive advantage in its industry/market by adopting generic strategies
strategies of porter’s
- lower costs
- differentiation
lower costs
a business manager decides that their strength is to become the lowest cost producer of a product
lower costs advantages
- Strong competitive advantage in markets with price conscious consumers
- Encourages customers to try the product due to the low price –> results in returning customers
- Accessible to a wide range of customers –> as more affordable for all people
lower costs disadvantages
- Customers may associate a lower price with lower quality –> could deter customers away
- If business choose to lower price, may need to substantial sales to general a profit
- May be difficult and time consuming to determine effective ways to reduce costs w/o impacting quality
differentiation
to be more innovative and creative than their competitors and create goods/services that have a unique point of difference compared to their competitors
differentiation advantages
- Can change a premium price as the cost is not an important consideration for customers
- Creates brand loyalty and this can increase competitiveness
- Powerful at generating a strong a well known brand image
differentiation disadvantages
- Limited target market to those require unique feature or can afford to purchase
- Business can copy unique point of difference meaning the competitive advantage is lost
- Can be quite expensive to be unique, increasing costs and making it hard to generate a profit
similarities between lower costs and differentiation
- Both approach are used as a way for a business to gain a competitive advantage
- Both it is easier for larger business to spend on research and development to innovate
- Both aim to achieve business objectives
differences - lower costs
- Attracts price sensitive customers
- Internal focus on how the business can reduce costs
differences - differentiation
- Attract brand loyal and quality conscious customers
- External focus on how they can provide unique point of difference compared to rivals
