year 13 flashcards

Strategic Positioning

How a business positions itself relative to its competitors.

Strategic Decisions

Long-term, high-risk decisions essential for business success that provide clear focus and influence decisions and targets.

Ansoff's Matrix

A matrix used alongside Porter's Five Forces to develop new products in new markets (diversification).

Strategic Positioning

How a business is perceived relative to other businesses in the industry.

Cost Leadership

Achieving lower costs than rivals in the same industry.

Differentiation Strategy

Offering more benefits than rivals in the same industry.

Competitive Advantage

An advantage a business has over its competitors, gained by offering customers greater value through lower prices or benefits that justify higher prices.

Cost Leadership & Cost Focus Strategies

Strategies focused on becoming the lowest-cost operator, typically involving large-scale production and economies of scale.

Differentiation Strategy

Aim to offer a product distinctively different from the competition, with customers valuing the differentiation.

Ikea's Strategy

Stylish, good-quality furniture at low costs and prices, representing a hybrid strategy.

Influences on Choice of Positioning Strategy

Evaluating market conditions, competitor positioning, and internal strengths to determine the best strategic approach.

Benefits of Competitive Advantage

Helps a business compete, increase sales, and build brand loyalty.

Organic Growth

Expanding a business's operations, such as launching new products.

Economies of Scale

Occurs when unit costs fall as a business expands, relating to volume.

Economies of Scope

Occurs when a business gains cost advantages by sharing costs between different products and services divisions.

External Growth

Growing by joining with other businesses, such as through a takeover.

Synergy

When combined businesses perform better than they did individually.

Overtrading

Expanding a business rapidly without obtaining all the necessary finance, so a cash flow shortage develops.

Diseconomies of Scale

The disadvantages experienced as a result of operating beyond the optimum output, leading to a rise in average costs.

Retrenchment

Reducing costs to become more financially stable, increase profits, and make out of loss-making areas of operation.

Internal Economies of Scale

Arise from the increased output of the business itself.

External Economies of Scale

Occur within an industry, benefiting all competitors.

Technical Economies

Ability of larger firms to buy technically advanced equipment and spread costs over a larger number of units.

Purchasing Economies

Firms that produce on a large scale need greater amounts of raw materials and therefore can negotiate prices and discounts with suppliers.

Managerial Economies

As a business expands, they may bring in specialists to focus on parts of the business.

Causes of Diseconomies of Scale

Communication problems, poor morale of staff, and control and coordination issues.

Impact of Lowering Unit Costs

Cost savings can be passed on to customers through low prices or reinvested to make higher profits.

Economies of Scope

Cost advantages by sharing costs between disparate products and divisions.

Integration

Bringing together two firms.

Merger

When two or more firms agree to join as one firm under joint membership.

Takeover

When one firm gains control over another and becomes the owner.

Horizontal Integration

Two firms integrate at the same stage within a process.

Vertical Integration

Two firms at different stages within a process integrate.

Conglomerate Integration

Two unrelated firms integrate.

Joint Venture

Involves businesses sharing information and resources on same projects but retaining their own identity.

Franchise

When one business sells the rights to another business to use its name and sell its goods or services in return for a fee.

Innovation

Occurs when a new idea is brought to fruition and turned into a good or service that can be used or sold.

Intrapreneurship

Occurs when individuals within organizations are being entrepreneurial - taking risks and generating new ideas.

Intellectual Property

The legal protection businesses and individuals get for their ideas, inventions, or trademarks to prevent others from imitating them.

Kaizen

Refers to a process of continuous improvement.

Benchmarking

Occurs when a business tries to match the approach and success of a particular process that is used by another organization.

Copyright

Protection of films, text, music and plays. Protection is gained through automatic right.

Process Innovation

Aims to make the operations of a business more efficient or faster.

Product Innovation

Provides extra benefits to the consumer in terms of what they are buying.

Technology's role in process innovation

Helps firms track resources, monitor workflows, and measure the quality of stages.

Value of Innovation

Necessary to remain competitive and maintain profitability.

Offshoring

Relocation of business activities from the home country to a different international location.

Re-shoring

When a business moves production back to its domestic country.

Internationalization

Businesses moving operations or sales into different (overseas) markets.

Alliances/Ventures

Occur when a domestic firm works in a partnership with an overseas business.

Licensing

When a business sells the right to an overseas business to produce or sell its products.

Direct Investment

Direct investment involves the greatest level of commitment and risk.

Reasons for Offshoring

Access lower manufacturing costs, access better-quality supply, and make use of capacity overseas.

Drawbacks to Globalization

Increased need for investment, increased threat of takeover, and increased price competition.

Emerging Markets

Brazil, Russia, India, China, Turkey, Mexico etc.

Benefits of internationalisation

increased sales,cheaper resources, economies of scale

Digital Technology

Use of digital resources to find, analyse, create, communicate, and use info digitally.

E-commerce

The buying and selling of goods or services or the transmitting of funds over an electronic network.

Data Mining

An analytical process that aims to analyse data to identify patterns and relationships between variables.

Big data

huge amount of data that can now be mined from multiple sources to find links.

E-commerce

Aims to identify relationships between variables.

Strategic Success in E-commerce

No guarantee of success, influenced by rapid changes; failing to adopt e-commerce is likely to be less competitive.

Benefits of E-commerce

Cheap advertisement, more sales, competitive advantage, less labor intensive, more capital intensive.

Automation

Uses technology such as artificial intelligence and machine learning to automate processes; provides reliable data for informed decisions.

Benefits of Automation

Levels playing field, saves time, improves customer experience, increases productivity, reduces errors.

Drawbacks of Automation

Job displacement/unemployment, initial implementation costs, technical challenges/limitations, reduced human interaction, dependency and loss of skills.

Big Data

Large quantity of data generated by retail e-commerce, user interactions, logistics, social media, location data, and the Internet of Things.

Key Uses of Big Data

Tracking and monitoring performance/safety, generating marketing insights, improving decision making.

Data Mining

Analysing data and summarizing it into useful information, identifying unseen relationships, predicting future trends, extracting commercial value, generating actionable strategies.

M-commerce

Commercial transactions initiated using mobile devices; the fastest-growing part of e-commerce driven by rapid smartphone adoption.

Cyber-hacking

Unauthorized and illegal access to and manipulation of computerized networks.

Product Life Cycle

Model predicting a product's revenues and cash flows over its life cycle; thought to be shortened by technological change from e-commerce.

Key Impacts of E-commerce on Marketing

Larger target audience, cheaper advertisement, shortened product life cycle, wider product range, increased need for localization, greater use of digital promotion.

Impacts of E-commerce on HR Management

Assessing employees' attitude outside work, requiring less staff, needing employees with a broader range of digital skills, potential poorer working conditions in e-commerce warehouses.

Impacts of E-commerce on Operations

Becoming capital intensive, increasing importance of economies of scale, e-commerce platforms are complex, allows smaller businesses to compete with bigger businesses.

Impacts of E-commerce on Finance

Allowing customers to pay in installments, reducing fixed costs, and impacting exchange rates.

Internal Change

Change that happens within a business.

Restructuring

Reorganizing the organizational structure of a business.

External Change

Change that happens outside of the business.

Disruptive Change

Significant game-changing developments in an industry.

Incremental Change

Change that happens step by step within a business, e.g., gradual improvements.

Mechanistic Structures

Formal structures with clear levels of hierarchy and tight control over employees.

Organic Structures

More informal structures with teams created for specific projects.

Delayering

Occurs when a business removes a level of hierarchy from the organization.

Lewin’s Force Field Analysis - Driving forces

Highlights that at any moment there are forces for and against change, needing to keep up with competitors, increasing customer complaints, new owners wanting higher returns, and poor performance

Lewin’s Force Field Analysis - Restraining forces

Highlights that at any moment there are forces for and against change, lack of finance, reluctance of existing staff to change, and resistance from certain stakeholder groups.

Value of a Flexible Organization

Allows businesses to move employees around as and when needed and switch tasks or location; depends on managers knowing what is happening and ensuring relevant information is available.

Value of managing into + knowledge

The ability to mange data effectivly so that managers can identify changes before or as they happen, develop suitable strategies to respond or prepare for, and evaluate the effectiveness of the strategies adopted

Barriers to change

Reasons for resistance of changes: Self interest, misunderstading, different assessments and prefering the status quo

Kotter and Schlesinger's six ways of overcoming resistance

Overcoming resistance to change: Education, Participation, Faciliation, Negotiation, Manipulation, and Coercion

Organisational Culture

Refers to the attitudes, values, and beliefs of employees.

Task Culture

Individuals identify with the task they are working on.

Role Culture

Clear role within the organization.

Power Culture

A few key people at the center of the organization.

Person Culture

Individuals have their own space and are given parts of the business to make decisions on and control.

The Reason For Organizational Change

Reason business might change : remain relevant & increase innovation + creativity levels

Strategy

Long-term plan to achieve a business's vision through attaining its corporate objectives.

Leadership

Includes functions of ruling, guiding, and inspiring other people within an organization in pursuit of agreed objectives.

Organisational structure

The way a business is arranged to carry out its activities.

Network analysis

Occurs when the activities involved in a project are analysed in a network diagram.