business unit 4 aos 1

business change

 Business change occurs when an organisation improves, restructures or transforms a part of its operations in response to internal and/or external pressures.

proactive approach

a manager who foresees alterations in the business environments and looks to implement changes in order to take advantage.

the update to homepage took adv of tech to get ahead of the trend

reactive approach

a business is impacted by the business environments and is forced to change in order to protect or preserve its position in the market

the ad-based subscription was reactive as it was in response to losing subscribers and market share

KPI’s

Precise and measurable data which can be used to measure or evaluate the performance of organisations or individuals achieving objectives. 

percentage of market share- KPI’s

the portion of sales that a business has compared to the total sales for the industry or product

Netflix remains most dominant however increased competition means their marker share as dropped

net profit figures- KPIs

amount that is left over after expenses have been deducted from revenue earned

Netflix net profits have declined which are key reasons for new ad-based subscription

rate of productivity growth- KPIs

measure of efficiency for a business and compares the number of outputs produced to the number of inputs used in production and the rate in which this increases overtime

number of sales- KPIs

the number of goods/services sold over a given period of time (subscriber growth for Netflix)
Netflix experienced a drop in subscribers, showing marker was becoming more competitive

rates of staff absenteeism- KPIs

the rate in which employees fail to attend work on a given day when they are scheduled to be there.

level of wastage- KPIs

amount of resources that are discarded by the business during the production process

number of customer complaints- KPIs

amount of consumers that are dissatisfied with the business and its products and have expressed their concerns to the business

number of website hits- KPIs

measures each request to a server for a file from a website

number of workplaces accidents- KPIs

amount of unplanned or uncontrolled events that result in personal injury or property damage at a business

driving forces def

forces which initiate, encourage and support the change, they work to assist the business to achieve its goal

owners- driving forces for change

looking for a return on their investment

initiate changes they believe will enable them to fulfill their vision and provide a greater return on their investment

managers- driving forces for change

initiates change that helps to position the business for the future

Netflix CEO Greg peters has been at forefront of changes to attract new users and cope with the decline in subscribers

employees- driving forces for change

major role in the success of the change by initiating or supporting change

competitors- driving force for change

initiate change given that there is an ongoing battle for market share

rising number of streaming services has contributed to decline in subscriber base for Netflix, impacting their sales and driving many changes

pursuit of profit- driving forces for change

common goal of making a profit

ad based subscription plan was to increase number of subscribers and thus profits

legislation- driving forces for change

changes in legislation will initiate change within businesses as they need to update their practices and be in line with the new legislation

reduction of costs- driving forces for change

often businesses are unable to succeed because their costs are too high

netflix looked to reduce costs through their restructure of gaming division which reduced development costs

globalisation- driving forces for change

business begins operating at an international level, increasing competitiveness and expanding market share

technology- driving forces for change

evolving rapidly, putting pressure on businesses to adapt to remain competitive

at Netflix rapid advancements in AI created new opportunities to personalise the customer experience

innovation- driving forces for change

introducing new ideas in the form of processes, products or methods

societal attitudes-driving forces for change

changing overtime causing change in businesses

at netflix aus households reducing no. of streaming services, netflix responded by the cheaper subscription plan

GELTOP CRIS

globalisation

employees

legislation

technology

owners and managers

pursuit of profit

competitors

reduction of costs

innovation

societal attitudes

restraining forces

those forces which work against the change, thus creating resistance to the achievement of the goal

managers- restraining forces

the leader of changes needs to demonstrate the benefits of change to key stakeholders which will be difficult if the manager does not believe in the benefits themselves

at Netflix they may not have experience with these specific changes and make errors working against successful changes

employees- restraining forces for change

key stakeholders that resist the change and work against it

time- restraining forces for change

insufficient time to implement change or could be wrong time to implement change

organisational inertia- restraining forces for change

people unenthusiastic towards change

legislation- restraining forces for change

a business may find that legislation makes a change difficult to implement.

financial considerations- restraining forces

the cost of change is a major consideration

at Netflix there is a significant cost with implementing the changes through an increase in employees to work on these projects

METOLF

managers

employees

time

organisational inertia

legislation

financial considerations

lewins force field analysis def

a tool used to compare forces for and against a particular change so that an informed decision can be made

principles of FFA

identify the goal or desired outcome

identify driving and restraining forces

give a weighting and rank the forces

implement a response to strengthen the driving forces and weaken the restraining forces

evaluate the outcome

strengths of FFA

encourages business to consider both forces before acting, reducing the risk of poorly planned change

clear visual framework that makes complex change situations easy to understand and communicate to stakeholders

weaknesses of FFA

identifying and weighing forces is highly subjective, and two managers may reach very different conclusions

forces are treated as static but in reality, their strength and nature are constantly changing during implementation

porters generic strategies

a strategic management theory describing how a business can seek to acquire a competitive adv in it industry or market, therefore dominating that industry or increase its market share in it

lower cost-porters generic strategies

where a business gains a competitive adv by being the low-cost producer in the industry

how to lower costs

cutting costs throughout areas of the business, attracting price sensitive customers

aiming for no frills and offering high volumes of standardised products

adv of lower costs

gains a competitive advantage

attracts price sensitive customers

can withstand price wars (rivals struggle to match costs) longer than competitors

disadv of lower costs

reduced quality perception in the market and customers may see products as generic

if prices are lowered, sales volumes need to increase to make substantial profits

constantly lowering price may impact the quality of the product

differentiation- porters generic strategies

a business gains a competitive advantage by being unique in some way that is valued by customers

how to differentiate

new improved goods and services

marketing that clearly seperates business from competitors- netflix spending significant amounts on producing their own content and their own movies and tv shows

adv of differentiation

gains a competitive advantage

can develop brand loyalty, customer perceive the product as unique

reduces price competition (less susceptible to price wars)- as rivals cannot replicate unique features

disadv of differentiation

more expensive to be unique

possibility of being replicated by competitors

sim between lower cost and differentiation

both outline how a business can gain a competitive advantage in their industry
both strategies aim to maintain or increase profit margins

differences between lower cost and differentiation

lower cost can increase market share by attracting price sensitive consumers who often lack brand loyalty whereas differentiation attracts customers that are often more brand loyal and willing to pau a premium price.

lower costs result in lowering the costs of the business whereas differentiation often results in higher costs.