Problem Solving

State the 4 different types of Problem Solving Strategies.

1. Corporate Strategies

2. Integration Strategies

3. Generic Strategies

4. Other Strategies

State the purpose of and the 3 strategies within the Corporate Strategies umbrella.

Corporate Strategies are used to create or defend a businesses competitive advantage.

1. Corporate Combination

2. Decline/Defensive Strategies

3. Growth Strategies

State and explain the 2 possible courses of action under Corporate Combination.

Corporate Combination:

1. Joint Venture [Two or more businesses agee to combine resources in order to create competitive advantage].

2. Merge/Takeover [Two or more different businesses form to create a single new business in order to create competitive advantage].

State and explain the 3 possible courses of action under Decline/Defensive Strategies.

Decline/Defensive Strategies:

1. Retrenchment Strategy [To reduce the size of the business or its range of products]

2. Divestiture [The business sells of assets that hinder financial performance]

3. Liquidation [The business sells all of its assets to pay of debt and as a result, the business will no longer exist]

State and explain the 4 possible courses of action under Growth Strategies.

Growth Strategies:

1. Market Penetration [Increasing sales of existing products to an existing market to gain a larger market share.]

2. Product Development [Introducing new products to existing markets.]

3. Market Development [Entering new markets with existing products.]

4. Diversification [Entering a new market with a new product.]

State the 3 strategies within the Integration Strategies umbrella.

Integration Strategies are used to align various aspects of the supply chain and operations to improve efficiency and competitiveness.

1. Forward Integration

2. Horizontal Integration

3. Backward Integration

Explain the purposes of Forward, Horizontal and Backward Integration.

1. Forward Integration [The business takes over its distributor to decrease final selling price to customers.]

2. Horizontal Integration [The business takes over one of its competitors.]

3. Backward Integration [The business takes over its suppliers or establishes their own production company in order to gain control over the production process and eliminate the power of suppliers.]

State the purpose of and 3 strategies within the Generic Strategies umbrella.

Generic Strategies are how a business responds to challenges in the internal and external business environments.

1. Low Cost Strategy

2. Focus/Niche Market

3. Differentiation

Explain the purposes of Low Cost Strategy, Focus/Niche Market Strategy and Differentiation Strategy.

1. Low Cost [Low Input Costs (Cheap Raw Materials), Low Cost Manufacturing (The use of mass production) and the discontinuity of non-beneficial activities. All in order to reduce operational costs.]

2. Focus/Niche Market [The business targets a smaller customer demographic with unique tastes in order to offer them premium products to build customer loyalty.]

3. Differentiation [Factors of product uniqueness include: Quality, After-sales service, Product brand and Marketing/Distribution efforts.]

State the purpose of and the 2 strategies under the Other Strategies umbrella.

Other Strategies are used to improve the overall performance of the business.

1. Revise Business Objectives

2. Teamwork

State the purposes of Revising Business Objectives and Teamwork.

1. Revise Business Objectives [The business must keep up with customer demand and the changes in the external business environment.]

2. Teamwork [Allows individuals within the business to flourish and complement individual strengths and compensate for individual weaknesses.]

State the 8 Problem Solving Tools of Overall Business Performance.

1. Total Quality Control & Total Customer Satisfaction

2. Benchmarking

3. Financial ratios

4. Performance Appraisals (360^o) Self-Evaluation

5. Balanced Scorecard

6. Continuous Skill Development

7. Delphi Technique

8. Resource-Based Approach

State the 2 ways in which a business can implement the Total Quality Control & Total Customer Satisfaction tool.

1. Sampling [Checking the quality of every single product.]

2. Inspection [Checking the quality of one product out of a bach.]

State the purpose of the Benchmarking tool.

The business compares its current practices to the ideal of the industry and put measures in place to close the performance gap.

State the purpose of the Financial Ratios tool.

Financial ratios describe the businesses ability to adjust internal financial operations to increase profitability.

State the purpose of the Performance Appraisals (360^o) Self-Evaluation tool and its characteristics.

A tool used to plan, evaluate and improve staff performance.

1. Planning Tool [Establish performance targets.]

2. Evaluation Tool [Self-evaluation and performance checks from several parties.]

3. Feedback Tool [Promotion or Development of Action Plans.]

State the characteristics of the Balanced Scorecard tool.

1. Financial Perspective [Focus on maximum utilization of assets and reduction of operation costs.]

2. Customer Perspective [Focus on customer demands and expectations.]

3. Internal Business Perspective [Focus on innovation of products/services.]

4. Learning and Growth Perspective [Focus on the creation of intellectual capital by human capital (employees).]

State the purpose of the Continuous Skill Development tool.

Business environments in which employees are encouraged to learn and equip new skills to adapt to market trends.

State the purpose of the Delphi Technique tool.

A method of survey anonymous experts on an issue faced by a business and implement their feedback.

State the purpose of the Resource-Based Approach tool.

When faced with a problem, a business must determine:

• What resources are needed to solve the problem?

• What resources are available?

• What is the cost of those resources?

In order to manage the businesses tangible/intangible resources.

State and briefly explain the 4 pillars to the approach to creativity.

1. Fluency [The ability to produce multiple ideas.]

2. Flexibility [The ability to look at a situation through different perspectives.]

3. Originality [The ability to develop unique ideas.]

4. Elaboration [Adding detail and depth to ideas.]

State and briefly explain each letter of the SCAMPER method.

S ubstitute [Replace elements with alternatives]

C ombine [Merge different components]

A dapt [Update product to new preferences]

M odify [Change appearance/presentation]

P urpose [New function of a product]

E liminate [Reduction of useless elements]

R everse [Deconstruction of main pillars]

State difference between Resisting Forces and Driving Forces.

Resisting Forces are factors that hinder or create obstacles to change.

Driving Forces are factors that promote or support change.

State the steps of a Force Field Analysis.

1. Define Problem

2. Define Change Objective

3. Identify Driving Forces

4. Identify Resisting Forces

5. Develop Change Strategy

State at least 3 obstacles to creative thinking.

• The belief of one correct solution.

• Lack of Sleep.

• Routine/Logical Thinking.

• The “Why Change?” mindset.

• Lack of Time.

• Discouragement of creativity from superiors.

• “Its not my job to be creative”.

Define the term Indigenous Thinking.

The local knowledge and way of thinking that is unique to a culture or to a particular society. These skills and experiences of a particular group can be applied to develop a product/service.

State one advantage and one disadvantage of Indigenous Thinking.

Advantage:

Indigenous Thinking can create competitive advantage by offering a unique product/service to a customer group.

Disadvantage:

Indigenous Thinking can be a threat/weakness in a market that is unfamiliar with their product/service.