Questions Flashcards
(40 cards)
What is an organisation?
A group of people who work together in an organized way for a shared purpose
What are stakeholders?
A person such as an employee, customer or citizen who is involved with an organisation, society etc. and therefore has responsibilities towards it and an interest in its success.
What do stakeholders have an direct influence on?
buyers, suppliers, competitors, capital providers, employees, special interest groups, government and local authority institutions and media
What is a mission?
Mission statement:
- reason for being
- often vague and short
- will remain unchanged for years
What is a vision?
The desired end state for the company
- focuses on the future
- entails values of the company
- directs all activities of the organisation
What are aims?
General organisational goals for the future.
Relate to one or more of the following:
- balance of interest
- profitability
- quality
- effectivity and efficiency
- image
- code of conduct
What are objectives?
- SMART objectives (specific, measurable, acceptable, realistic & time-specific)
- Should be obtained within 1-3 years
What is the DESTEP model?
The external environment
Demographical
Economical
Socio-cultural
Technical
Ecological
Political
What are demographic factors?
- age and sex distribution
- live expectancy
- population size & density
- occupations (jobs)
- nationalities & ethnicities
What are economical factors?
- Level of economic development
- GDP (gross domestic product): is the total monetary of market value of all the finished goods and services produced within a country’s borders in a specific time period. It functions as a comprehensive scorecard of a give country’s economic health.
- Rate of inflation
- Wage levels / labour costs
- Level of unemployment
- Strength of currency
- Taxation structure / rates
- Income distribution: is there equality in the income distribution?
- Purchasing power
- Spending patterns
What are socio-cultural factors?
Is related to what kind of culture there is in my external environment. In this factors are included:
- Languages
- Religious and cultural froupings
- Educational attainment
- Level of social cohesion
- Press / social attitudes
- Life style attitudes and role of women
What are technological factors?
Refers to:
- R&D (Research and Development) activity: the more countries pay for research and development the higher the chance they are more technologically developed. - Patent /copyright protection: if you develop a new product how it will be secured in the future.
- Transport infrastructure
- Energy availability / costs
- Availability of skilled workforce
- Level / impact of technology adoption and transfer: how fast are people using new technology - Impact of emerging technologies
What are ecological factors?
- government attitude / polices / regulations (when government imposes rules on businesses) - Planning and building controls
- Recycling issues and costs
- Energy / water availability and consumption patterns of people
- Sector specific issues
What are political factors?
Politics imposes more and more regulations upon business so when we look for a place to establish our business we need to look for a couple of things.
- levels of law and corruption
- What kind of competition law and policy are there
- Business ownership regulations
- Employment law
- Consumer protection
- Sector specific laws
What are the Five Forces by Micheal Porter
The threat of new entrants
Bargaining power of suppliers
Bargaining power of buyers
Threat of substitutes
Rivalry amongst existing competitors or intensity of rivalry
When is there a threat of new entrants?
- low amount of capital is required to enter a market
- Existing companies can do a little to retailate
- Existing firms do not possess patents, trademarks or do not have an established brand reputation
- There is no government regulation
- Customer switching costs are low (it doesn’t cost a lot of money for a firm to switch to other industries)
- There is a low customer loyalty
- Products are nearly identical
- Economies of scale can be easily achieved
When is the bargaining power of suppliers high?
- There are few suppliers but many buyers
- Suppliers are large and threaten to forward integrate.
- Few substitute raw materials exist
- Suppliers hold on to scarce resources
- Cost of switching raw materials is especially high
When is the bargaining power of buyers high?
- buying in large quantities or control many access points to the final customer
- If only few buyers exist the bargaining power is high, and is not that good for the business.
- Switching costs to another supplier are low
- They threaten to integrate backwards
- There are many substitutes
- Buyers are price sensitive
What is the threat of substitudes?
Threat of substitute products are specially high if you look at electronic devices for example. If the threat of substitutes products is high it has a huge impact in the company.
- threatening when buyers can easily find substitute products with attractive prices or better quality.
- Switching cost means when you go to one product to another that substitutes it and if it doesn’t cost you anything the switching cost is low that means that is good for the buyer but not for the business. When buyers can switch from one product or service to another with little cost: switch from coffee to tea doesn’t cost anything unlike switching from car to bicycle.
When is the rivalry amongst competitors high?
- there are many competitors
- Exit barriers are high: if you want to invest in research you need to invest a lot of money and if you want to exit it will cost you a lot of money. If the exit barriers are high the competition is also high.
- The more competitors there are the higher the intensity of rivalry
- Industry of growth is slow or negative
- Products are not differentiated and can be easily substituted
- Competitors are of equal size
- Low customer loyalty
What is the confrontation matrix?
From SWOT to Confrontation Matrix, you match the strengths and weaknesses from the internal environment with the opportunities and threats from the external analysis any by mixing them you get the confrontation matrix.
Strenght-Opportunities strategies
which of the company’s strengths can be used to maximize the opportunities you identified? What opportunities are there and what I am good at so I can use this opportunities and match them with my strong points.
Strenght-Threats strategies
how can I use the company’s strengths to minimize the threats you identified? So are there things in the external environment which I can fight with my own strengths?
Weakness-Opportunity strategies
what actions can you take to minimize the company’s weaknesses using the opportunities you identified?
