transforming a business

Question 1

define business change

Answer 1

the adoption of a new idea or behaviour where businesses change as a result from pressures of the business environment

Question 2

define incremental changes

Answer 2

small continuous changes that occur regularly in the business EG. new process

Question 3

define transformational changes

Answer 3

significant changes that often impact the whole business EG. company restructure

Question 4

define proactive

Answer 4

foreseeing changes in the dynamic environment and taking advantage

Question 5

define reactive

Answer 5

letting business environments impact a business before changes are made

Question 6

define key performance indicators

Answer 6

specific set of criteria that measure the efficiency and effectiveness of a business performance

Question 7

what are the 9 key performance indicators

Answer 7

net profit 
percentage market share 
level of wastage 
number of workplace accidents 
number of sales 
number of customer complaints 
level of staff turnover 
rate of staff absenteeism
rate of productivity growth

Question 8

define benchmarking

Answer 8

being able to compare results against some form of standard

Question 9

define driving forces

Answer 9

those that initiate or support change. push the business towards a new desired state

Question 10

what are the 10 driving forces

Answer 10

managers
employees
legalisation
innovation
pursuit of profit 
competitors 
reduction of costs 
technology 
societal attitudes 
globalisation

Question 11

managers (DF)

Answer 11

make decisions, can initiate change after analysis of KPI data

Question 12

employees (DF)

Answer 12

drive change through innovation by placing demands on the business to change

Question 13

competitors

Answer 13

competition can make a business change in order to gain a competitive advantage

Question 14

legalisation (DF)

Answer 14

changes to laws can force a business to change

Question 15

pursuit of profit

Answer 15

businesses are always looking to increase profit and gain money

Question 16

reduction of costs

Answer 16

businesses have high costs, which can initiate change to lower costs and gain money

Question 17

globalisation

Answer 17

process where economic boundaries are removed and businesses operate on an international scale

Question 18

technology

Answer 18

businesses need to keep up with technology to remain competitive

Question 19

innovation

Answer 19

adopting something new or improving on something that exists already

Question 20

societal attitudes

Answer 20

businesses need to keep up with customer attitudes to keep their sales up

Question 21

define restraining forces

Answer 21

those that work against a proposed change

Question 22

what are the 6 restraining forces

Answer 22

managers
employees
time
organisational interia 
legalislation 
financial considerations

Question 23

managers (RF)

Answer 23

middle or lower management may not support the change made by senior management

Question 24

employees (RF)

Answer 24

change can bring on feelings of anxiety or for people that don’t want to change which can cause resistance

Question 25

time

Answer 25

businesses may not have enough time to implement change successfully

Question 26

organisational interia

Answer 26

a businesses lack to embrace change. they ,ay be used to doing things certain way and therefore resist it

Question 27

legalisation (RF)

Answer 27

may block or make it difficult for businesses to change things they want

Question 28

financial considerations

Answer 28

businesses may not have enough money to implement the change

Question 29

define force field analysis

Answer 29

process of identifying and analysing the forces that will drive and those that will resist a proposed change

Question 30

what are the steps to implement force field analysis

Answer 30

1. define target of change 2. identify driving and restraining forces 3. analyse forces to be changed (scores) 4. develop an action plan

Question 31

what are 2 benefits of the force field analysis

Answer 31

- managers able to identify whether it will be successful or not - allows mangers to find ways of reducing restraining forces

Question 32

define the lower cost strategy

Answer 32

where a business is able to gain a competitive advantage by becoming the low cost producer in the industry

Question 33

how can businesses achieve lower cost stratergy

Answer 33

achieving economies of scale, implementing technology

Question 34

define value chain

Answer 34

set of activities a business performs to add value to a good or service

Question 35

strength of lower cost strategy

Answer 35

strong competitive advantage in markets with "price conscious" consumers

Question 36

weakness of lower cost stratergy

Answer 36

potentially lower customer loyalty because customers are only price sensitive

Question 37

define the differentiation strategy

Answer 37

where the business aims to be unique in its industry in some way valued by its customers

Question 38

how can differentiation be achieved

Answer 38

high quality materials marketing innovations

Question 39

strength of differentiation

Answer 39

strong competitive advantage in markets with brand loyalty

Question 40

weakness of differentiation

Answer 40

unique features can be copied or mimicked by other producers

Question 41

what 5 factors should businesses consider before deciding on a stratergy

Answer 41

- rivalry amongst existing competitors - bargaining power of supplies - entry of new competitors - threat of substitutes - bargaining power or buyers

Question 42

define rivalry amongst existing competitors

Answer 42

if a business has many competitors, they may have reduced market attractiveness

Question 43

define bargaining power of suppliers

Answer 43

how easy it is for suppliers to drive up the price of the item to supply to a business

Question 44

define entry of new competitors

Answer 44

markets that are profitable will always attract new competitors, therefore they will always have new competitors to go against

Question 45

define threat of substitutes

Answer 45

some businesses operate in environments where close substitutes exist e.g.. coke

Question 46

define bargaining power of buyers

Answer 46

businesses need to consider how easy it is for buyers to reduce prices e.g.. bulk prices