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Employee commitment

Human resources that execute day to day tasks of the company

Employee commitment - Why is it important?

enable operation by viewing companies success as their own

Employee commitment - Actions

Hire: hire employees who are a good fit to the organization
Train: train employees with the right tools to ensure success
Motivate: motivate through rewarding their work and giving opprotiunties to move up

Employee commitment - connections

Consumer Experience: provide good customer service
Products & Services: provide revenue through sales
Uniqueness: provide new ideas
Innovation: create better products

Employee commitment - KPI

Turnover: how many employees leave and must be replaced
Applications: how many people think they are a good fit and are interested in working at the organization
Productivity: calculating sales generated by units sold per employee

Employee commitment - what affects it

what can it affect?

Customer satisfaction

Individual groups or organizations that consume products & services (target market)

Customer satisfaction - Why is it important?

Provides revenue and validates organizations value by determining growth. If consumers aren't satisfied organization will lose to competitors.

Customer satisfaction - Actions

Target: Who are we catering to?
Understand: What does the target market value in a product?
Anticipate: what will the consumers value?
Satisfy: make customers feel satisfied with our products/services

Customer satisfaction - connections

Employee commitment: if employees are not committed

KPI -Customer satisfaction

Market share: how much of the market organization holds
Net promoter score: how much customers would recommend to others
Churn: how many customers leave and must be replaced
Share of wallet: how much customers are willing to spend of their earnings on ur organization

Innovation

valuable change brought to an organization to existing practices

Innovation - Why is it important?

Environmental anylsis

improvement: reflects a companys ability to adapt to an ever changing environment

Innovation - ACtions?

Culture: Having an open-minded company receptive to new ideas through encouragement of creation
Structure: Having a structure that allows for the voicing of new ideas
Rewards: Rewarding those who innovate is essential in making an innovative culture

Innovation - Connections?

Customers: new ways to satisfy customers
Products & services: improves products & services and improved internal consistency
Employee commitment: humans want to create meaningful change

Innovation - KPI

New products: can the structure of the company adopt new products
New approaches : can the structure of the company adopt new approaches
Idea Generation : how many valuable ideas are thought of
Cycle time: how long it takes to implement new approaches

Uniqueness

Distinctive competitive advantage means being different from your competitors in a way that can be considered strategically and finacially valuable

Uniqueness - Why is it important?

Market advantage: this is important because it separates you from someone else

Uniqueness - actions

Competitor & market insight

unique resources or capabilities: see what competitors are doing

and do something different. see what the market values and apply that to make u unique. use resources your competitor can't imitate.

Uniqueness - conections

Consumer: if ur unique consumers will be loyal and are easier to attract
Financial performance: they allow u to drive up prices and bring in more income
Employees: will view company as something that align with their interests and work hard
innovation: uniqueness drives innovation

Uniqueness - KPI

Strong unqiue reputation

Products & services

what customers receive from you

Products & Services - Why is it important?

Revenue means: they are the mechanism u use to satisfy ur customer and why they do business with you

Products & Services - actions

Define : define the value of your product which will define the quality
Inputs : by adding value and reliability to your product there must be high levels of input as customers expect consistency
Processes: control the process that allows u to produce the same product at the same quality every time

Products & Services - connections

Innovation: consistent quality is achieved through regularly improved and standardized processes of production
Uniqueness: affected as a product is different from othersl gives you leverage amoung competitors
Financial performance: through it's impact on revenue and expenses (higher quality

Products & Services - KPI

Defects: measure number of products with defects (inconsistency)
Returns: products returned
Warranty : amount of warranty claims reported
Waste: measure the amount of inputs relative to outputs (less waste = higher quality of work)

Financial resources

the money that a company earns

Financial resources - Why is it important?

Enable growth

Financial resources - actions

Sound strategic decisions efficient & effective execution: created by having well-implemented and wise strategic decisions and effective and efficient operations

Financial resources - connections

affects all other factors because it determines the amount of investment available towards the other factors

Financial resources - KPI

Revenues: amount of money generated by sales
Profit

revenue - expenses
Growth: shows company constantly improving
ROI
Firm value

Threat of New Entrants - Impact on profitability

easier it is for new companies to enter

Threat of New Entrants - Factors

Economies of scale: larger firms benefit from lower costs per unit which makes it harder for new entrants to compete
Capital requirement: high startup costs deter new entrants
Brand loyalty and differentiation - strong brand identity or customer loyalty discourages new entrants
Access to distribution channels.- difficulty in accessing key suppliers
Regulatory barriers: legal requirements increases barriers to entry

Threat of New Entrants - Method to reduce impact

-Strengthen brand loyalty and customer loyalty

• Increasing economies of scale through expansion
• Creating partnerships with key suppliers
• lobbying for regualtions to keep barriers

Threat of New Entrants - Industry examples

Pharmaceuticals - high R & D costs

Threat of New Entrants - Diamond E

Resources - firm needs financial capital and technological know-hows to create entry barriers

Supplier power - impact on profitability

if supplier have significant power

supplier power - factors

Number of suppliers - few suppliers = power increases
Switching Costs - if it costs for firms to switch suppliers

Supplier power - methods to reduce impact

• diversifying the supplier base to reduce reliance on any single supplier
• developing alternative sources or in house capabilities
  building long term partnerships with suppliers for better terms

Supplier power - Industry example

Automotive manufacturing - some components (like semiconductors) have few suppliers

Supplier power - diamond e

Resources & Organization - a firms ability to manage its supply chain effectively depends on resources allocation and organizational strategy

Buyer power - impact on profitability

powerful buyers can demand low prices

Buyer power - factors

buyer concentration - few large buyers = leverage
price sensitivity - buyers who are highly price sensitive can force firms to compete on cost > quality
switching cost - a buyer who can easily switch suppliers has more negotiating power
product differentiation - if products are standard

Buyer power - methods to reduce impact

• create product differentiation to make switching less attractive
  -build strong relations w customers through loyalty programs or contracts
  -offering value-added services that increase switching costs

Buyer power - industry example

retail - large retailer like amazon have signifcant power over suppliers

Buyer power - diamond e

strategy & resource- companies must leverage strategic relationships and resources to counter buyer power

threat of substitutes- impact on profitability

the presences of subs limit price that a company can charge

Supplier power - factors

avail of subs - if many exist the threat increases (taxi vs ride sharing apps)
switching costs - easy for customers to switch = vulnerable firms
quality/performance of subs: if they offer better performance

Supplier power - methods to reduce impact

-innovate to improve product quality or performance
-increase customer loyalty through brand strength or unique features
-increase switching costs by offering bundled services or long term contracts

Supplier power - industry example

telecom industry - the threat from messaging apps as subs for traditional phone services have forced telecoms to adapt their pricing models

Supplier power - diamond e

environment and resources - firms need to understand externa1

competitive rivalry - impact on profitability

high competition forces companies to reduce prices

competitive rivalry - factors

number of competitors - more competitors increase rivalry
industry growth rate - slow growth intensified rivalry

competitive rivalry - methods to reduce impact

-create strong brand loyalty or unique products to reduce the need to compete on price

• merging or acquiring competitors to reduce industry fragmentation
  -focusing on customer services or niche markets to differentiate

competitive rivalry - industry example

mcd and bk have been had intense rivalry

competitive rivalry - diamond e

strategy and management preferences - companies need to strategically manage competitive pressures and maintain differentiation

Political - Pest

any condition that reflects the relationship between govt and business (regulation)

Political - Pest (element)

• laws
• regulations
• international trade laws
• trade agreements
• politcal risks

Political - Pest (examples)

-change in labour laws

Political - Pest (impact on business)

political factors create opportunity or pose risks

Political - Pest (impact on pest FACTORS)

E - tax change can affect consumer purchasing
s - immigration policies can influence operations
t - govt funding for research

Economic - Pest

The conditions of the economic system in which an organization operates

Economical - Pest (elements)

GDP

Economical - Pest (examples)

rise in inflation increases cost of raw materials

Economical - (impact on business)

economic factors directly influence operation

Economical - (impact on pest)

social - high unemployment leads to social unrest
political - government might intervene in weak economies
technology - recessions can limit R & D spending

Social

How the culture values goods and services provided by an organization

Social - Pest (elements)

Values/attitudes

Social - Pest (example)

Ageing population leads to higher demand for healthcare services

Social - Pest (impact on business)

Affects demand for products

Social - Pest (impact on pest)

Political - gender equality movements drive for new workplace laws.
Economic - changes in consumer behaviour drive up market demand.
Technological - demand for connected devices

Technology

Technology includes all the ways that firms create value for their constituents through the use of technology (R + D)

Tech - Pest (elements)

Information technology

Tech - Pest (examples)

Rise in ecommerce affecting traditional retail

Tech - Pest (impact on business)

can disrupt industries

Impact on PEST factors

Social - rise of social media.
Economic - improving productivity through automation

Cost leadership (walmart)

• Achieve lowest cost of production across a broad market
• Internal Considerations - Organization should reflect a focus on efficiency and operational excellence. Invest into efficient production and cost-cutting tech.
• External Considerations - Works best in markets where price sensitivity is high and customers prioritise lower prices or differentiation
• large firms as they have access to operational efficiencies to access cost effective production units (buyer power)

Cost focus (freedom)

• Be the lowest-cost producer in a narrow market or niche.
• Internal Considerations - Requires specialised knowledge on a niche customer segment.
  Resource and operational focus must be tailored to serve the niche efficiently.
• External Considerations - Works well in markets where niche markets also have cost
  sensitive customers
• smaller firms adopt this to target niche markets

Differentiation strategy - apple

-Offer unique products that are perceived to have more value across a broad market.
-Internal Considerations - Must have strong R&D capabilities

Differentiation focus - porche

-Offer unique products to a niche market.
-Internal Considerations - Specialise in innovation