UNIT 4 AOS 1 THE NEED FOR CHANGE Flashcards
(19 cards)
change
any alteration in the external or internal environments
proactive
initiating change rather
than simply reacting to events
reactive
waiting for a change to
occur and then responding to it
key peformance indicators
specific criteria used to measure the efficiency and effectiveness of a business’s performance
What are the 10 KPIs?
Percentage of market share, net profit figures, rate of productivity growth, number of sales, rate of absenteeism, level of staff turnover, level of wastage, number of complaints, number of website hits, number of workplace accidents
Competitive advantage
When a business has a lower cost price structure than its competitors
Business change
The adoption of a new idea or behaviour resulting in a difference in the form or operation of a business over time
Force field analysis
A model for understanding the factors, or forces, that will influence a given situation
Driving forces
The forces that initiate, encourage and support the change
Restraining forces
Those forces that work against the change, creating resistance
Discuss force field analysis
Strengths- Businesses are able to weigh up factors for and against whether the change is worth undertaking and it allows a business to strengthen driving forces and reduce restraining
Weaknesses-may omit some forces and the weighting of forces is subjective
What are the 10 driving forces?
Owners, employees, competitors , legislation, pursuit of profit,reduction of costs, globalisation, technology,innovation and societal attitudes
What are the 6 restraining forces?
Managers, employees, time, organisational inertia, financial considerations and legislation
What are the two categories of Porter’s generic strategies approach
Cost advantage and differentiation advantage
Porter’s generic strategies approach
Outlines ways businesses can gain a competitive advantage
Cost advantage
A competitive advantage is gained through reducing costs of the business, allowing it to operate with larger profit margins compared to its market rivals
Differentiation advantage
Businesses gain a competitive advantage through differentiating their good or service from others in the market
Product differentiation
the use of factors such as brand names, delivery methods and advertising to establish differences between substitutable products
