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Business 3&4 > Unit 4 AOS1 > Flashcards

Unit 4 AOS1 Flashcards

1
Q

what is a business change?

A

the alteration of behaviours, policies, and practices of a business.

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2
Q

what are the 2 types of approaches a business can have to business change

A
  • reactive
  • proactive
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3
Q

proactive approach to business change definition

A

A proactive approach is when a business changes to avoid future problems or take advantage of an opportunity to gain a competitive advantage.

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4
Q

reactive approach to business change definition

A

A reactive approach is when a business undertakes change in response to a situation or crisis.

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5
Q

what is 2 similarities between a proactive approach and a reactive approach to business change

A
  • They are utilised by a manager or business to implement change
  • they involve the business undertaking change for future benefits, such as growth, progression, and to improve or restore its brand image
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6
Q

What are 3 main differences between a proactive and reactive response to business change

A
  • why they occur (in response or to take advantage of future)
  • the use of risk strategies (reactive = high risk, proactive = low)
  • the planning or timing of response
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7
Q

What are the 10 KPI’s

A
  • percentage of market share
  • net profit figures
  • rate of productivity growth
  • number of sales
  • number of customer complaints
  • rates of staff absenteeism
  • level of staff turnover
  • number of workplace accidents
  • level of wastage
  • number of website hits
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8
Q

What are key performance indicators

A

Key performance indicators (KPIs) are criteria that measure a business’s efficiency and effectiveness in achieving its different objectives

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9
Q

percentage of market share definition

A

Percentage of market share measures the proportion of a business’s total sales, compared to the total sales in the industry, expressed as a percentage figure

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10
Q

net profit figures definition

A

net profit figures are calculated by subtracting total expenses incurred from total business revenue earned, over a specific period of time

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11
Q

rate of productivity growth definition

A

Rate of productivity growth is the change in the total output produced from a given level of inputs over time, expressed as a percentage figure.

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12
Q

number of sales definition

A

Number of sales is the total quantity of goods and services sold by a business over a specific period of time.

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13
Q

number of customer complaints definition

A

Number of customer complaints is the number of customers who notified the business of their dissatisfaction over a specific period of time.

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14
Q

rates of staff absenteeism definition

A

Rates of staff absenteeism are the average number of days employees are not present when scheduled to be at work, for a specific period of time.

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15
Q

level of staff turnover definition

A

Level of staff turnover is the percentage of employees that leave a business over a specific period of time and must be replaced

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16
Q

number of workplace accidents definition

A

Number of workplace accidents measures the amount of injuries and unsafe incidents that occur at a work location over a specific period of time.

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17
Q

level of wastage definition

A

Level of wastage is the amount of inputs and outputs that are discarded during the production process.

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18
Q

number of website hits definition

A

Number of website hits is the amount of customer visits that a business’s online platform receives for a specific period of time

19
Q

how to calculate rate of productivity growth

A

(new productivity - old productivity) / old productivity
times 100

20
Q

force field analysis definition

A

Force Field Analysis is a theoretical model that determines if businesses should proceed with a proposed change.

21
Q

what are driving forces

A

Driving forces are the factors affecting the business environment that promote and support business change

22
Q

what are restraining forces

A

restraining forces are factors that resist a business change or actively try to stop it.

23
Q

what are the 4 processes in a force field analysis

A
  1. weighting
  2. ranking
  3. implementing a response
  4. evaluating a response
24
Q

weighting (force field analysis) definition

A

Weighting is the process of scoring and attributing a value to the driving and restraining forces.

25
Q

in simple what happens in weighting (Force Field Analysis)

A

Business will identify driving and restraining forces and then rank them based on importance
Mostly 1-5 rank

26
Q

what ranking tells us in terms of driving vs restraining (FFA)

A
  • If driving higher likely to succeed
  • If driving equal or lower it is unlikely to succeed
27
Q

In simple what is implementing a response (FFA)

A

Implementing an action that can be taken to strengthen the driving forces, reduce or eliminate the restraining forces, and/or the actual execution of the change.

28
Q

what happens in ranking (FFA)

A

each driving and restraining forces ranks are added together to see if the driving outweighs, are equal to, or less than the restraining forces

29
Q

in simple what is happening in evaluating a response

A

comparing the actual change to the anticipated change and determining whether further action needs to be taken.
This can be done by using KPI’s to measure the success

30
Q

what are the 11 driving forces we have to remember

A
  • owners
  • managers
  • employees
  • pursuit of profit
  • reduction of cost
  • competitors
  • legislation
  • globalisation
  • technology
  • innovation
  • societal attitudes
31
Q

what is globalisation

A

the process by which governments, businesses, and people across the globe are becoming more interconnected, allowing for increased international trade and cultural exchange

32
Q

innovation definition

A

Innovation is the process of altering and improving or creating new products or procedures.

33
Q

societal attitudes definition

A

Societal attitudes are the collective values, beliefs, and views of the general public.

34
Q

what are the 6 restraining forces we need to know

A
  • managers
  • employees
  • legislation
  • organisational inertia
  • time
  • financial considerations
35
Q

organisational inertia definition

A

Organisational inertia is an unenthusiastic response from the people within the business to the proposed change.

36
Q

What are Porter’s two generic strategies

A
  • lower cost
  • differentiation
37
Q

Porter’s lower cost strategy definition

A

Porter’s lower cost strategy involves a business offering customers similar or lower-priced products compared to the industry average, while remaining profitable by achieving the lowest cost of operations among competitors.

38
Q

what are 3 advantages of businesses using Porter’s lower cost strategy

A
  • Attractive to cost-conscious customers
  • Reduces the expense of operations
  • barriers to entry for new competitors as it is often challenging for them to match lower prices
39
Q

what are 3 disadvantages of businesses using Porter’s lower cost strategy

A
  • Customers are not loyal to particular brands
  • Low prices may result in customer perceptions that the good or service is of lower quality
  • Thin profit margins and reliance on low operating costs can leave a business vulnerable to unexpected increases in expenses
40
Q

porter’s differentiation strategy definition

A

Porter’s differentiation strategy involves offering customers unique services or product features that are of perceived value to customers, which can then be sold at a higher price than competitors.

41
Q

what are 3 advantages of Porter’s differentiation strategy

A
  • Customers are often loyal to the business because of unique product features or services not offered by competitors.
  • Quicker sales from loyal customers when new products or services from the business are introduced
  • Can charge premium prices for products as customers cannot purchase the product elsewhere.
42
Q

what are 3 disadvantages of Porter’s differentiation strategy

A
  • Can be difficult to prevent competitors from replicating points of differentiation.
  • Higher selling prices can deter cost-conscious consumers.
  • New employees may require additional training to adapt their skills to match the business’s point of difference.
43
Q

what is a similarity between Porter’s lower cost and differentiation strategies

A

They both increase a business’s profitability by providing a competitive advantage

44
Q

competitive advantage definition

A

Competitive advantage is the conditions or attributes that place a business in a superior position compared to its immediate competitors.

Business 3&4 (7 decks)

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