Section 11,12,13 and 14 Flashcards
(20 cards)
1
Q
What are some internal changes?
A
- Changes in the size of the business
- Poor performance
- New ownership structure
- New leadership/CEO
2
Q
What are the external changes(6 of them)
A
- PESTEL
- Political,economic,social,technological, weather and Legal
3
Q
What is Kaizen?
A
- Incremental change
- Continues improvement and put plans out to improve.
4
Q
What are examples of disruptive change?
A
- Uber disrupting black taxi service. Tesla disrupting other car manufacturers to go electric.
- Competitors directly influencing businesses.
5
Q
What are the 3 broad benefits of change?
A
- Productivity
- Competitiveness
- Financial performance
6
Q
What does the Lewin Force field analysis show?
A
- Shows the driving forces and restraining forces when making decisions. (Positives and negatives)
- When there is more positive forces than negative then the business will usually go ahead with the decision.
- Eg. A new factory, driving forces would be it’s a great location and will increase production. Restricting forces is it may be hit with environmental legislation and already high employment in the area leading to high employee power.
7
Q
What are the effects on stakeholders of Lewis force field?
A
- On shareholders, they may withdraw if they don’t think the change will be successful.
- On employees, if they don’t think it will be successful they may fear for there job.
- For customers, may not like the new changes leading to a decrease in sales.
8
Q
What are all the integration types for?
A
- They are types of growth. Don’t get confused with methods of growth like mergers.
9
Q
What is backwards vertical integration and what are its benefits?
What will this have in reference to Porter’s five forces?
A
- This is growing by moving closer to its suppliers or its raw materials.
+ This will have more control on supply chain.
+ Decreases supplier power which leads to better prices.
Eg, Fast food chain moving closer to the farm for its meats to decrease delivery costs
10
Q
What is forward vertical integration and what are the benefits?
Which of Porter’s five forces are included?
A
- This is moving closer to the end consumers.
+ More control over retailers and outlets.
+More control over the distribution network.
+ It may reduce buyer power therefore can increase their prices with less competitors.
Eg. Manufacturers may buy the retail chain to sell directly to customers.
11
Q
What is Horizontal integration and what are the benefits with reference to Porter’s five forces?
A
- Expanding by acquiring or merging with competitors who sell the same product in the same market(Product development)
+ Increase market share as competitors will be decreased.
+ Benefit from economies of scale because there output will increase therefore average cost per unit will decrease.
+ Will reduce rivalry in the market and will also increase barriers to entry.
Eg. McDonalds buys Burger King.
12
Q
What is Conglomerate integration?
A
- Expanding into unrelated industries. Will diversify.
+ Spreads risk
+ Encourages synergies
Eg, Vodafone buys Taco Bell.
13
Q
What are the pros of using critical path analysis?
A
- It increases efficiency as it identifies any floats and reduces waste. Lean production.
- Can help decide to use just in time which can help improve cash flow.
- Suits for manager using delegation.
14
Q
What are the drawbacks of critical path analysis?
A
- Timely and costly to make. Need to employ someone with project management skills.
- If estimates are wrong it may mess up critical path which may not actually be the critical path.
- May become obsessed with achieving the critical path which can lead to shortcuts and cutting costs which can decrease quality which may effect sales.
15
Q
What is the purpose of Ansoff’s Matrix?
A
- Helps managers identify the risk and the direction they need to take to achieve strategic growth.
16
Q
What are the 4 strategies of strategic growth?
A
- Product development
- Market development
- Market penetration
- Diversification
17
Q
What is Market penetration?
A
- Trying to increase your market share in your existing market. Will use pricing strategies, promotions and advertising to increase this. It works best in a growing market.
+ Safest option that involves little risk.
+ Can help increase MS slightly. - Limited growth
- Doesn’t work in saturated markets.
18
Q
What is product development?
A
- Selling new products in your existing market. It is best when the business has good growth potential and a high market share.
19
Q
What is Market development?
A
- Selling your existing product in a new market. It can be done by repositioning into a different segment of the market. Need to be able to research their market and adapt their product to suit their needs.
20
Q
What is diversification?
A
- Operating in a new market with a new product. It is very risky however has the most growth potential and spreads risk. Best example of this is Virgin.
