admn 400 exam 2

Data-Driven Decision Making

The process of making decisions based on data rather than intuition or observation. This approach enhances accuracy and effectiveness in business strategies.

Value of Data

Data is a critical asset that can drive insights, improve operational efficiency, and enhance customer experiences. Organizations that leverage data effectively can gain a competitive edge.

Data and Statistics

Metrics used to elevate the success of an organization in achieving its objectives. Examples include sales growth, customer retention rates and operational efficiency metrics.

Key Performance Indicators

Objective measures of the performance of your business. They provide crucial information on sales, marketing, finances, productivity or any other organizational goals as defined by the company. They enable you to make changes to the segments of the business that may be underperforming. They should offer you insight into the process made by your business in a given period of time.

Operations Management

Planning, organizing and supervising in the contexts of production, manufacturing or the provision of services.

Production Planning

The first decisions facing operations managers come at the planning stage. At this stage, managers decide where, when, and how production will occur. They determine site locations and obtain the necessary resources.

Production Process

The way a good or service is created. Need to determine which type of production process best fits with the type of good or service being produced, the company goals and customer demand.

Production Control

At this stage, the decision-making process focuses on controlling quality and costs, scheduling, and the actual day-to-day operations of running a factory or service facility.

Improving Production and Operations

The final stage of operations management focuses on developing more efficient methods of producing the firm's goods or services.

Mass Production

Manufacturing many identical goods at once. Examples include canned goods, over the counter drugs, and household appliances.

Customization

Company produces goods or services one at a time according to the specific needs or wants of individual customers. Examples include customized shirts and personal training.

Mass Customization

Goods are produced using mass-production techniques, but only up to a point. At that point, the product or service is customer-tailored to the needs or desires of individual customers. An example is modular homes.

Critical Path Method

Manager identifies all activities required to complete a project, the relationships between these activities and the order in which they need to be completed. Manager develops a 'network diagram' to show how the tasks are dependent on each other. Analysis is conducted to identify the critical path.

Critical Path

Represents the path of activities that if not on time, the entire project will fall behind. This method helps determine a project's anticipated end date.

Promotional mix

the combination of traditional advertising, personal selling, sales promotion, public relations, social media and e-commerce used to promote a product

Traditional advertising

any paid form of nonpersonal promotion by an identified sponsor that is delivered through traditional media channels

Personal selling

a face-to-face presentation to a prospective buyer

Sales promotion

marketing activities that stimulate consumer buying, including coupons and samples, displays, shows and exhibitions, demonstrations and other types of selling efforts

Public relations

the linking of organizational goals with key aspects of the public interest and the development of programs designed to earn public understanding and acceptance

Social media

the use of social media platforms such as Facebook, Twitter, Pinterest, Instagram and blogs to generate "buzz" about a product or company

E-commerce

the use of a company's website to generate sales through online ordering, information, interactive components such as games, and other elements

Integrated marketing campaign

combines multiple channels such as content, email, display advertising and social media in order to promote a consistent message to a specific audience

New brain

rational (thinks) - Controls speech, logic, and higher thinking skills

Middle brain

emotional (feels) - Controls emotion and motivations

Reptilian brain

instinctual (decides) - Controls our automatic self-preserving behavior patterns

Intensive growth strategies

Exploit growth opportunities inside the current market

Market penetration

Increases sales through effective marketing strategies within the current target market

Market development

Expand sales through expanding geographic representation

Product development

Increase sales through new products/services

Integrative growth strategies

Exploit growth within the industry as a whole

Vertical integration strategies

Growing forward/backward within the supply chain

Horizontal integration strategies

Buying up competitors within the current industry

Diversification strategies

Exploit opportunities outside the current market/industry

Synergistic strategy

Acquire products/services unrelated to the core

Global strategies

Exploit opportunities in the international arena

Characteristics of successful globalization

A global vision from the start, internationally experienced managers, strong international business networks

How globalization is measured

Revenue, Cost, Profits, Earnings per share, Customer demand, Customer retention, Market share, Workforce health

Silicon Valley Bank collapse

The failure of Silicon Valley Bank due to a lack of consumer diversification and high asset concentration in long-term securities.

Diversification

The strategy of spreading investments across various consumers to reduce risk.

Long-term securities

Financial instruments that are held for an extended period, which can limit liquidity.

Federal Reserve

The central banking system of the United States that manages monetary policy, including interest rates.

Interest rates

The amount charged by lenders to borrowers for the use of money, typically expressed as a percentage.

Behavioral Finance

A field of study that examines the psychological factors influencing investors' irrational behaviors.

Representativeness

A cognitive bias where individuals judge probabilities based on how much one event resembles another.

Overconfidence

A bias where individuals overestimate their knowledge or ability to predict outcomes.

Anchoring

A cognitive bias that involves relying too heavily on the first piece of information encountered when making decisions.

Ambiguity aversion

The preference for known risks over unknown risks.

Loss aversion

The tendency to prefer avoiding losses over acquiring equivalent gains.

Framing

The way information is presented, which can significantly affect decision-making.

Distinctive Competencies

Unique strategies that a company possesses, which can be leveraged to achieve competitive advantage.

Product Ecosystems

A set of products that are used complementarily to one another, enhancing overall value through interconnection.

Ethics in the workplace

Beliefs or moral standards about what is right and wrong in a business context.

Business ethics

Ethical or unethical behavior by employees in the context of their jobs.

Corporate Social Responsibility (CSR)

The concern of a business for the welfare of society, encompassing ethical practices and community benefit.

Dimensions of CSR

The various aspects of corporate social responsibility, including economic, legal, ethical, and philanthropic dimensions.

Economic dimension of CSR

The requirement for businesses to be profitable, maximize sales, and minimize costs.

Legal dimension of CSR

The obligation for businesses to obey laws and adhere to regulations.

Ethical dimension of CSR

The expectation for businesses to avoid questionable practices and act fairly and justly.

Philanthropic dimension of CSR

The desire for businesses to be good corporate citizens and give back to the community.

Friedman's view on business responsibility

The argument that the only social responsibility of business is to increase its profits within legal and ethical boundaries.

Executives as Agents

The concept that corporate executives are employees of shareholders and their primary duty is to maximize shareholder value.

Social Responsibility

If a manager uses profits to serve social causes, it's like imposing a tax on shareholders, customers, or employees—without democratic process or consent.

Political Implications

Decisions about social goals (like fighting pollution or poverty) are for elected governments, not private individuals in corporate roles.

Bypassing Democratic Systems

Allowing businesses to make these decisions bypasses democratic systems, moving us toward socialism.

Practical Problems

Executives lack the expertise to make effective decisions about societal problems.

Vague Social Goals

Acting on vague social goals can hurt profits and make companies less competitive.

Hypocrisy & Image Management

Often, companies frame profit-driven decisions as socially responsible to gain public favor.

Window-Dressing

Friedman sees this as window-dressing that may help in the short term but erodes the credibility and foundation of capitalism in the long run.

Free Market

The market is based on voluntary cooperation—no one is forced.

Political Mechanism

The political mechanism involves conformity—majority rules, even if some individuals disagree.

Marketing Defined

Putting the right product in the right place, at the right price, at the right time.

Marketing Environment

Marketing decisions need to consider the external environment, or factors outside an organization's boundaries or control.

Sociocultural Environment

Refers to the buying behaviors, customs, values and demographic characteristics of the society in which the organization functions.

Economic Environment

Economic conditions that influence spending patterns by consumers, businesses and governments.

Marketing Mix

Refers to all the marketing activities that a business will use to achieve its marketing goals.

5 P's

Product, price, place, promotion, and people.

Product

How is it different than other products in the market?

Place

Where can customers get access to the product?

Price

What price point will it be sold?

Promotion

What are the channels for marketing communications?

People

How does the company view their employees?

Types of Competition

Substitute product: product that is different from those of competitors but can fulfill the same need.

Brand Competition

Appeals to consumers' perceptions of benefits of products offered by particular companies.

International Competition

Domestic products against foreign products.

Marketing Research

The systematic and objective study of customers and competitors in an industry.

Observation

Watching and recording consumer behavior.

Surveys

Collecting consumer data through questionnaires, calls or face to face interviews.

Focus Groups

Using a small group of people to gather their attitudes, opinions and beliefs about a product in an open discussion.

Experimentation

Using different sample groups to test variations of a product.

Competitive Advantage

A set of unique features of a company and its products that are perceived by the target markets as significant and superior to those of the competition.

Cost Advantage

Maintaining profit margin at lower costs.

Product/Service Differentiation

Includes brand names, image, product reliability, service quantity.

Niche Advantage

Serving a specific segment of the population.

Starbucks in Australia

Starbucks's main problem when it expanded to Australia was the fact that it launched too rapidly and didn't give Australians time to adjust.

Starbucks failure in Australia

Starbucks failed to understand the Australian culture appropriately and their style of how they run their business did not align with how Australians were used to, which is smaller cafes.

Store closures

In 2008, Starbucks had to shut down 61 stores in Australia and over 600 in the US.

Mismatch with Australian preferences

Starbucks' style did not match Australians; they did not offer products that Australians were used to, prices were too high, and the large number of locations was not something they were accustomed to.

Role of accounting

Provides essential information for decision-making, financial reporting and compliance with regulations.

Types of accounting

Financial accounting, management accounting, tax accounting and auditing.

Accounting equation

Assets = Liabilities + Equity.