change

business unit 4 aos1

Business Change

Any alteration to a business and/or its work environment.

Organisational Change

Involves transforming an existing form into a new one.

Proactive Change

Anticipates future business impacts and implements changes to minimize them.

Reactive Change

Implemented due to a situation that has already been impacted.

Incremental Change

Less traumatic and part of natural business development.

Transformational Change

Results in major business alterations, often initiated by critical events like a dramatic drop in financial performance.

Key Performance Indicators (KPIs)

Measure a business's efficiency and effectiveness in achieving objectives.

Percentage of Market Share

Measures a business's sales compared to industry totals.

Net Profit Analysis

The remaining amount after deducting expenses from revenue.

Rate of Productivity Growth

Refers to the increase in outputs compared to inputs used over time.

Number of Sales

The total quantity of goods or services sold by a business over a specific period.

Number of Customer Complaints

Number of customers reporting dissatisfaction over time.

Driving Forces

Promote and support business change, guiding change implementation.

Restraining Forces

Hinder change implementation, resisting change.

Force Field Analysis

Examines driving forces and restraining forces in achieving change.

Porter’s Generic Strategies

Different approaches for competitive advantage in a crowded marketplace.

Porter's Generic Strategies

Lower Cost (no frills) and Differentiation (creating uniquely desirable products and services)

Entry of New Competitors

Businesses must adapt to attract new competitors to maintain market share.

Threat of Substitutes

Customers can find similar products or services.

Bargaining Power of Buyers and Suppliers

Buyers can reduce supplier prices.

Bargaining Power of Suppliers

Suppliers can raise prices.

Rivalry among Existing Competitors

The number and capability of competitors.

Lower Cost Strategy

Aims to gain competitive advantage by minimizing product and service delivery costs.

Cost Reduction Implications

Focuses on cost reduction, targets broad market, achieves competitive advantage by reducing costs.

Differentiation Strategy

Unique features of products or services that are perceived value to customers.

Procurement

Purchasing premium inputs.

Patents

Protecting product uniqueness.

Niche Marketing

Effective segment-specific sales campaigns.

Relationships

Forming high-profile/talented personnel.

Innovation/Technology

Introducing new processes.

Training

Enhancing employee skills.

Distribution

Improving delivery systems.

Business Extra Costs and Premium Pricing

Business incurs extra costs like high advertising for differentiated brand image.

Porters Generic Strategies

Lower Cost, Differentiation

Similarities

Both aim to gain a competitive advantage, both look to maximize profits

Differences

Lower cost reduces expenses while charging industry average prices, Differentiation has higher expenses passed on to consumers as unique product/service.