Unit 4 AOS1

Question 1

what is a business change?

Answer 1

the alteration of behaviours, policies, and practices of a business.

Question 2

what are the 2 types of approaches a business can have to business change

Answer 2

• reactive
• proactive

Question 3

proactive approach to business change definition

Answer 3

A proactive approach is when a business changes to avoid future problems or take advantage of an opportunity to gain a competitive advantage.

Question 4

reactive approach to business change definition

Answer 4

A reactive approach is when a business undertakes change in response to a situation or crisis.

Question 5

what is 2 similarities between a proactive approach and a reactive approach to business change

Answer 5

• They are utilised by a manager or business to implement change
• they involve the business undertaking change for future benefits, such as growth, progression, and to improve or restore its brand image

Question 6

What are 3 main differences between a proactive and reactive response to business change

Answer 6

• why they occur (in response or to take advantage of future)
• the use of risk strategies (reactive = high risk, proactive = low)
• the planning or timing of response

Question 7

What are the 10 KPI’s

Answer 7

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

Question 8

What are key performance indicators

Answer 8

Key performance indicators (KPIs) are criteria that measure a business’s efficiency and effectiveness in achieving its different objectives

Question 9

percentage of market share definition

Answer 9

Percentage of market share measures the proportion of a business’s total sales, compared to the total sales in the industry, expressed as a percentage figure

Question 10

net profit figures definition

Answer 10

net profit figures are calculated by subtracting total expenses incurred from total business revenue earned, over a specific period of time

Question 11

rate of productivity growth definition

Answer 11

Rate of productivity growth is the change in the total output produced from a given level of inputs over time, expressed as a percentage figure.

Question 12

number of sales definition

Answer 12

Number of sales is the total quantity of goods and services sold by a business over a specific period of time.

Question 13

number of customer complaints definition

Answer 13

Number of customer complaints is the number of customers who notified the business of their dissatisfaction over a specific period of time.

Question 14

rates of staff absenteeism definition

Answer 14

Rates of staff absenteeism are the average number of days employees are not present when scheduled to be at work, for a specific period of time.

Question 15

level of staff turnover definition

Answer 15

Level of staff turnover is the percentage of employees that leave a business over a specific period of time and must be replaced

Question 16

number of workplace accidents definition

Answer 16

Number of workplace accidents measures the amount of injuries and unsafe incidents that occur at a work location over a specific period of time.

Question 17

level of wastage definition

Answer 17

Level of wastage is the amount of inputs and outputs that are discarded during the production process.

Question 18

number of website hits definition

Answer 18

Number of website hits is the amount of customer visits that a business’s online platform receives for a specific period of time

Question 19

how to calculate rate of productivity growth

Answer 19

(new productivity - old productivity) / old productivity
times 100

Question 20

force field analysis definition

Answer 20

Force Field Analysis is a theoretical model that determines if businesses should proceed with a proposed change.

Question 21

what are driving forces

Answer 21

Driving forces are the factors affecting the business environment that promote and support business change

Question 22

what are restraining forces

Answer 22

restraining forces are factors that resist a business change or actively try to stop it.

Question 23

what are the 4 processes in a force field analysis

Answer 23

1. weighting
2. ranking
3. implementing a response
4. evaluating a response

Question 24

weighting (force field analysis) definition

Answer 24

Weighting is the process of scoring and attributing a value to the driving and restraining forces.

Question 25

in simple what happens in weighting (Force Field Analysis)

Answer 25

Business will identify driving and restraining forces and then rank them based on importance Mostly 1-5 rank

Question 26

what ranking tells us in terms of driving vs restraining (FFA)

Answer 26

- If driving higher likely to succeed - If driving equal or lower it is unlikely to succeed

Question 27

In simple what is implementing a response (FFA)

Answer 27

Implementing an action that can be taken to strengthen the driving forces, reduce or eliminate the restraining forces, and/or the actual execution of the change.

Question 28

what happens in ranking (FFA)

Answer 28

each driving and restraining forces ranks are added together to see if the driving outweighs, are equal to, or less than the restraining forces

Question 29

in simple what is happening in evaluating a response

Answer 29

comparing the actual change to the anticipated change and determining whether further action needs to be taken. This can be done by using KPI's to measure the success

Question 30

what are the 11 driving forces we have to remember

Answer 30

- owners - managers - employees - pursuit of profit - reduction of cost - competitors - legislation - globalisation - technology - innovation - societal attitudes

Question 31

what is globalisation

Answer 31

the process by which governments, businesses, and people across the globe are becoming more interconnected, allowing for increased international trade and cultural exchange

Question 32

innovation definition

Answer 32

Innovation is the process of altering and improving or creating new products or procedures.

Question 33

societal attitudes definition

Answer 33

Societal attitudes are the collective values, beliefs, and views of the general public.

Question 34

what are the 6 restraining forces we need to know

Answer 34

- managers - employees - legislation - organisational inertia - time - financial considerations

Question 35

organisational inertia definition

Answer 35

Organisational inertia is an unenthusiastic response from the people within the business to the proposed change.

Question 36

What are Porter's two generic strategies

Answer 36

- lower cost - differentiation

Question 37

Porter's lower cost strategy definition

Answer 37

Porter’s lower cost strategy involves a business offering customers similar or lower-priced products compared to the industry average, while remaining profitable by achieving the lowest cost of operations among competitors.

Question 38

what are 3 advantages of businesses using Porter's lower cost strategy

Answer 38

- Attractive to cost-conscious customers - Reduces the expense of operations - barriers to entry for new competitors as it is often challenging for them to match lower prices

Question 39

what are 3 disadvantages of businesses using Porter's lower cost strategy

Answer 39

- Customers are not loyal to particular brands - Low prices may result in customer perceptions that the good or service is of lower quality - Thin profit margins and reliance on low operating costs can leave a business vulnerable to unexpected increases in expenses

Question 40

porter's differentiation strategy definition

Answer 40

Porter’s differentiation strategy involves offering customers unique services or product features that are of perceived value to customers, which can then be sold at a higher price than competitors.

Question 41

what are 3 advantages of Porter's differentiation strategy

Answer 41

- Customers are often loyal to the business because of unique product features or services not offered by competitors. - Quicker sales from loyal customers when new products or services from the business are introduced - Can charge premium prices for products as customers cannot purchase the product elsewhere.

Question 42

what are 3 disadvantages of Porter's differentiation strategy

Answer 42

- Can be difficult to prevent competitors from replicating points of differentiation. - Higher selling prices can deter cost-conscious consumers. - New employees may require additional training to adapt their skills to match the business’s point of difference.

Question 43

what is a similarity between Porter's lower cost and differentiation strategies

Answer 43

They both increase a business's profitability by providing a competitive advantage

Question 44

competitive advantage definition

Answer 44

Competitive advantage is the conditions or attributes that place a business in a superior position compared to its immediate competitors.