Business chapter 4

Business Chapter 4 flash cards

Business change 

is the alteration of behaviours, policies, and practices of a business.

proactive approach

is when a business changes to avoid future problems or take advantage of an opportunity to gain a competitive advantage.

gap in the market

is when there is a need that is currently unmet in an industry and poses a profitable opportunity for businesses

reactive approach

is when a business undertakes change in response to a situation or crisis.

Key performance indicators (KPIs)

are criteria that measure a business’s efficiency and effectiveness in achieving its different objectives.

Percentage of market share

measures the proportion of a business’s total sales, compared to the total sales in the industry, expressed as a percentage figure.

Net profit figures

are calculated by subtracting total expenses incurred from total business revenue earned, over a specific period of time.

Rate of productivity growth

is the change in the total output produced from a given level of inputs over time, expressed as a percentage figure.

Number of sales

is the total quantity of goods and services sold by a business over a specific period of time.

Number of customer complaints

is the number of customers who notified the business of their dissatisfaction over a specific period of time.

Rates of staff absenteeism

are the average number of days employees are not present when scheduled to be at work, for a specific period of time.

Level of staff turnover

is the percentage of employees that leave a business over a specific period of time and must be replaced.

Number of workplace accidents

measures the amount of injuries and unsafe incidents that occur at a work location over a specific period of time.

Level of wastage

is the amount of inputs and outputs that are discarded during the production process.

Number of website hits

is the amount of customer visits that a business’s online platform receives for a specific period of time.

Force Field Analysis

is a theoretical model that determines if businesses should proceed with a proposed change.

Driving forces

are factors affecting the business environment that promote and support business change.

Restraining forces

are factors that resist a business change or actively try to stop it.

Weighting

is the process of scoring and attributing a value to the driving and restraining forces.

Driving forces

are factors affecting the business environment that promote and support business change.

Driving forces

Owners Managers Employees Pursuit of profit Reduction of costs Competitors Legislation Globalisation Technology Innovation Societal attitudes

Restraining forces

are factors that resist a business change or actively try to stop it

Restraining forces

Managers Employees Legislation Organisational inertia Time Financial considerations

Porter’s lower cost strategy

involves a business offering customers similar or lower-priced products compared to the industry average, while remaining profitable by achieving the lowest cost of operations among competitors.

Porter’s differentiation strategy

 involves offering customers unique services or product features that are of perceived value to customers, which can then be sold at a higher price than competitors.