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E2 (CIMA) > 1. Business Models > Flashcards

1. Business Models Flashcards

1
Q

What are the 2 traditional appraisal methods of an organisation?

A

PESTEL and Porter’s 5 Forces

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2
Q

What are the factors considered in PESTEL analysis?

A

Political, Economical, Social, Technological, Ecological, Legal

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3
Q

What are the 3 levels of PESTEL analysis?

A

Local, National, Global

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4
Q

What do Porter’s 5 Forces determine?

A

Competitive Intensity and therefore the attractiveness of a market.

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5
Q

What are Porter’s Five Forces?

A
  1. The Threat of Substitute Products
  2. The Threat of Entry of New Competitors
  3. The Bargaining Power of Customers
  4. The Bargaining Power of Suppliers
  5. The Intensity of Competitive Rivalry
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6
Q

What is Porter’s Sixth Force?

A

The Government

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7
Q

What are Porter’s 3 generic strategies?

A
  1. Cost Leader
  2. Differentiation
  3. Niche or Focus
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8
Q

What is the risk to companies who do not adopt a strong generic strategy?

A

Being “stuck in the middle” and squeezed out the market first.

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9
Q

What is a business ecosystem?

A

An economic community supported by a foundation of interacting organisations and individuals.

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10
Q

What is one of the key features of the business ecosystem?

A

All organisations have to reinvent themselves every 20-30 years.

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11
Q

What is the most key factor that has lead to the speed up of the evolution process of an ecosystem?

A

Digitisation

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12
Q

What 3 factors contribute to digitisation in relation to the ecosystem?

A
  1. The extent of the internet and its access
  2. The wealth of data
  3. Customer Empowerment
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13
Q

What 7 things does the digital customer want most?

A
  1. Tailored Products
  2. Seamless Experience across channels
  3. Anytime, Anywhere
  4. Great Service
  5. Self Service
  6. Transparency
  7. Peer Review and Advocacy
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14
Q

What 4 methods can organisations use to meet the demands of the digital customer?

A
  1. Design Thinking
  2. Experiential Pilots
  3. Prototyping
  4. Brand Atomisation
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15
Q

What are the 4 types of business model according to Libert, Beck and Wind?

A
  1. Asset Builder
  2. Service Provider
  3. Technology Creator
  4. Network Orchestrator
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16
Q

What is a network orchestrator?

A

Companies that deliver value through connectivity, creating a platform for transactions and interaction

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17
Q

What are the 10 principles of network orchestration?

A
  1. Create digital capabilities
  2. Invest in intangible assets
  3. Actively allocate capital
  4. Lead through co-creation
  5. Invite customers to co-create
  6. Focus on subscriptions
  7. Embrace freelance movement
  8. Integrate Big Date
  9. Choose leaders who represent customers
  10. Open minded to new possibilities
18
Q

What is mutuality?

A

The concept of working together, building a community that is fundamental to the network orchestrator concept.

19
Q

What are the 4 main technological developments that have enabled new platforms to connect?

A
  1. Cloud Computing
  2. Social Media
  3. Mobile Technology
  4. Data Analytics
20
Q

What are the two key factors of an ecosystem?

A
  1. Participants
  2. Interactions
21
Q

What are the 3 characteristics of the participants in an ecosystem?

A
  1. Role (what they do)
  2. Reach (how far they extend)
  3. Capability (key value proposition)
22
Q

What are the 3 characteristics of the interactions in an economy?

A
  1. Rules (define how)
  2. Connections (links)
  3. Course (speed and direction)
23
Q

What are the underpinning concepts in an ecosystem?

A
  1. Mutuality (working together)
  2. Orchestration (co-ordination)
24
Q

What 3 factors determine the complexity of an ecosystem?

A
  1. Number and diversity of participants
  2. Sophistication of activities
  3. Range and nature of relationships
25
Q

What 3 factors determine the orchestration of an economy?

A
  1. Strength and extent of influence
  2. Formality of interactions
  3. Degree of enforceability
26
Q

What is a shark tank ecosystem?

A

Low complexity, low orchestration.

Will need to innovate to survive - e.g. retail

27
Q

What is a hornet’s nest ecosystem?

A

High complexity, low orchestration.

High barriers to entry - e.g. media

28
Q

What is a lion’s pride ecosystem?

A

High Complexity, high orchestration.

Dominated by a powerful orchestrator - e.g. healthcare

29
Q

What is a wolf pack ecosystem?

A

Low complexity, high orchestration.

Less chance of domination by one participant - e.g. utilities.

30
Q

What is outsourcing?

A

Getting a specialist external provider to take over the supply of a product or service

31
Q

What are the advantages of outsourcing? (4)

A
  1. Can concentrate on core competencies.
  2. Cheaper, economies of scale.
  3. Access to expert knowledge.
  4. Greater cost certainty.
32
Q

What are the disadvantages of outsourcing?

A
  1. Confidentiality concerns
  2. Difficulty finding a reliable partner.
33
Q

What is offshoring?

A

Transfer of an activity to a foreign country

34
Q

What is a shared service centre?

A

A separate business unit created within a company to deliver a specific service to the company

35
Q

What is a strategic alliance?

A

An arrangement between two or more organisations to share resources to undertake mutually beneficial projects.

36
Q

What are the benefits of strategic alliance? (2)

A
  1. Less involved and less permanent than a joint venture
  2. Maintain autonomy
37
Q

What are the 4 alternative types of alliance?

A
  1. Franchising
  2. Consortia
  3. Licensing
  4. Joint Venture
38
Q

What are virtual teams?

A

Geographically dispersed teams that use tools on the internet to communicate and collaborate.

39
Q

What are virtual companies?

A

Companies whose members are geographically dispersed. A network of alliances and subcontracting arrangements,

40
Q

What are the 3 key risks associated with changing business ecosystems?

A
  1. Being left behind
  2. Investing in the wrong technology
  3. Failing to harness the potential of big data
41
Q

What are 2 key opportunities associated with changing business ecosystems?

A
  1. New products and services
  2. New platforms and partnerships
42
Q

What is the main difference between the traditional approach and the ecosystem stand on creating value?

A

Barriers should be removed, and the network creates value as a whole

E2 (CIMA) (5 decks)

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