Unit 4 AOS1 – Business Change & Netflix Case Study

Fill-in-the-blank flashcards covering definitions, theories, KPIs, driving/restraining forces, Porter’s strategies, and Netflix case study details for Unit 4 AOS1 Business Change.

Business change is any alteration in internal or external environments; the planned or unplanned adoption of a new idea or behaviour resulting in __ to a business.

an alteration to the way it operates over time

A __ approach to change refers to a business initiating change before being affected by environmental pressures.

proactive

A __ approach to change occurs when a business waits for change to occur and then responds.

reactive

Competitive __ occurs when a firm has a lower cost price structure, superior quality, or greater flexibility than its rivals.

advantage

One skill vital for managing change that involves clearly transferring information to stakeholders is __.

communication

Key performance indicators (KPIs) are specific criteria used to measure the __ and/or effectiveness of business performance.

efficiency

Percentage of market share is calculated by dividing a business’s sales by the __ and expressing it as a percentage.

total industry sales

__ profit figures represent what is left after operating costs, taxes, interest and depreciation have been deducted from revenue.

Net

The KPI that measures the change in productivity from one year to the next is called the rate of __ growth.

productivity

The number of workers who neglect to turn up for work when scheduled is called the rate of staff __.

absenteeism

The amount of employees leaving the business over a period, needing replacement, is known as the level of staff __.

turnover

The KPI that tracks unwanted or unusable material created during production is the level of __.

wastage

A rise in the __ of customer complaints suggests decreasing customer satisfaction.

number

Lewin’s model labels factors supporting change as __ forces.

driving

Factors working against change in Lewin’s model are called __ forces.

restraining

In a Force Field Analysis, each force is given a numerical __ to reflect its strength.

weighting

After weighting forces, managers must __ the top driving and restraining forces to focus their efforts.

rank (prioritise)

Creating a list of specific tasks and assigning responsibility is the ‘__ a response’ stage of Force Field Analysis.

implementing

Evaluating outcomes after actions have been taken is the final stage, known as __ the response.

reviewing (or evaluating)

A benefit of Force Field Analysis is that it visually displays forces, helping identify whether change is __ undertaking.

worth

A limitation of Force Field Analysis is that the weighting of forces can be __, introducing bias.

subjective

One driving force for change that stems from achieving higher returns for shareholders is the pursuit of __.

profit

Reducing wages through downsizing or replacing labour with technology is a strategy to achieve the driving force of __ of costs.

reduction

Rapid advancements in AI exemplify the driving force of __.

technology

Growing environmental concern in society represents the driving force of changing __ attitudes.

societal

Managers lacking experience with new technology can act as a __ force to change.

restraining

Limited funds to purchase new equipment illustrate the restraining force of __ considerations.

financial

The tendency of a business to maintain the status quo is called organisational __.

inertia

According to Porter, a business must choose either a lower cost or __ strategy to gain competitive advantage.

differentiation

Porter warns that firms trying to pursue both strategies risk being ‘__ in the middle’.

stuck

A lower cost strategy aims to be the industry’s __ cost producer.

lowest

Bulk purchasing, minimising idle stock and using assets efficiently are tactics to __ costs.

reduce

A disadvantage of a pure low-cost strategy is that customers may perceive the product as __ quality.

low

Differentiation seeks to make a product unique so the business can charge a __ price.

premium

Offering extended warranties or superior customer service are methods of product __.

differentiation

To remain profitable, a differentiator must still keep its costs at least close to its __ costs.

competitors’

Netflix’s cheaper ‘Basic with Ads’ plan introduced in 2023-25 represents a shift toward a __ cost offering.

lower

Allowing ads on its platform for the first time provides Netflix a new revenue stream called __ revenue.

advertising

Netflix’s redesigned AI-driven homepage ‘Eclipse’ is an example of using __ technology to enhance user experience.

generative AI

The restructure of Netflix’s gaming division to focus on smaller narrative games is primarily aimed at __ costs.

reducing

Netflix’s ad-tier was largely a __ response after losing over 1 million subscribers.

reactive

Conversely, redesigning the homepage before major competitor moves was a __ initiative.

proactive

In KPI analysis, after stating whether data increased or decreased, students should explain ‘This indicates that __’.

(insert interpretation of business performance)

One step when analysing KPIs is to suggest how the business could __ the issue or continue successes.

solve

‘Number of website hits’ is useful to see how many potential customers visit and how many hits convert to a __.

purchase

Benchmarking compares performance to another __ recognised for excellence.

business (or internal section)

Netflix’s Australian subscriber market share fell from 47% in 2017 to about __% in mid-2025.

30.1

Implementing lean production techniques is a recommended response when the KPI ‘level of wastage’ is __.

increasing (getting worse)

Staff counselling and motivation programs can address rising rates of staff __.

absenteeism (or turnover)

In Porter's Five Forces, the ease with which customers find alternatives is the threat of __.

substitution

Within the Five Forces, the measure of how strongly suppliers can raise prices is called __ power.

supplier

Time can restrain change when pressures emerge quickly and the business lacks time to __ its response.

plan

A Force Field Analysis diagram places driving forces on the __ side of the ‘T’ and restraining forces on the right.

left

Allocating numerical scores 1–5 in Force Field Analysis helps decide which forces to __ first.

address (strengthen/eliminate)

The ad-supported tier costs AU$7.99 per month in Australia, compared with the premium tier at AU$__.

25.99

In 2024 Netflix reported a Q1 net profit of $2.3 billion, up from $__ billion the previous year.

1.3

Amy Reinhard stated Netflix’s ad-supported plan now reaches more than __ M global monthly active users.

94

Netflix predicts its advertising revenue will __ in 2025 partly due to its in-house ad tech platform.

double

When discussing KPIs in exam answers, students must first __ the KPI before analysing data.

define

One advantage of the differentiation strategy is that brand loyalty allows charging __ prices.

higher/premium

A disadvantage of differentiation is the higher __ required for superior quality or innovation.

costs

Reducing labour costs via global manufacture is a response when net profit is falling due to high __.

expenses

In Lewin’s theory, if restraining forces exceed driving forces, change will __ occur.

not

Improved communication and training are common tactics to turn employee __ into driving forces.

resistance