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business theories/models - Coggle Diagram

- - - - chages in selling power
        
        threat of new entrants
        
        threat of substitutes
- - - - If a business adopts a differentiation strategy it seeks to be unique in its industry.
      - It chooses one of more benefits that buyers value and seeks to meet these better than competitors.
      - In return, it charges a premium price.
      - Emphasis is on being ‘different’ from the rest.
      - If a business adopts a focus strategy it concentrates on one segment within the market.
        
        The target segment may be different from the rest of the market because buyers have unusual needs.
        
        This can either be focussing on segments concerned with price, or those concerned with product.
- - - - Option one – low price/low added value
        
        likely to be segment specific.
        
        Option two – low price
        
        risk of price war and low margins/need to be a ‘cost leader’.
        
        Option three – hybrid
        
        low cost base and reinvestment in low price and differentiation.
        
        Option four – differentiation
        
        (a)without a price premium: perceived added value by user, yielding market share benefits.
        
        (b)with a price premium: perceived added value sufficient to to bear price premium.
        
        Option five – focussed differentiation
        
        perceived added value to a ‘particular segment’ warranting a premium price.
        
        Option six – increased price/standard
        
        higher margins if competitors do not value follow/risk of losing market share.
        
        Option seven – increased price/low values
        
        only feasible in a monopoly situation.
        
        Option eight – low value/standard price
        
        loss of market share.
- - - - MARKET PENETRATION Increasing market share by concentrating on existing products in existing market.
        Most common and safest strategy - company sticks to what it knows best.
        
        MARKET DEVELOPMENT Finding new markets for existing products. More risky because the company must grow in unfamiliar territories - potentially overseas. There will be an unknown consumer market, and potentially no market data - certainly no historical trading data.
        
        PRODUCT DEVELOPMENT Launching new products into your existing market. Product development is potentially harder than market development - only 1 in 7 new products succeed. There is heavy spending on R&D.
        
        DIVERSIFICATION The riskiest strategy given it means launching a new product in a new market. Highest business risk, forces businesses operate outside of its current capacity, experience, knowledge and range.
- - - - Strengths
      - Considers CSR and the social/environmental impact
      - Useful data to keep all stakeholders happy
      - Could incentivise management
      - If enforced by law, would encourage responsible behaviour of firms
      - Weaknesses
      - Doesn’t take into all considerations - eg, may measure workplace equality, but not measure workplace bullying.
      - Absence of political commitment to environmental and social impact.
      - The three lines can’t ‘add-up’ think - income from oil sales, but oil spill creates environmental disaster.
      - Therefore, organisations that use the model may have poor ethical standards.
- - - - Business process
      - How effective are we internally?
      - Operations, services vs product oriented, inventory control
      - Learning and growth
      - How can we change and improve?
      - Training and development provided, improvement suggestions, research and development
    - - Strengths
      - More all-round view of the company. Feeds into a SWOT analysis.
      - Encourages companies to look to present and future.
      - Measurement is management - effective management occurs in relation to activity that can be measured.
      - Weaknesses
      - Risk of becoming targets that can distort behaviour and objectives.
      - Outside consultancy often skew data and emphasize failures.
      - Creating a scorecard takes time and therefore inflexible.
- - - - based on targets , reward those who met them, piece rate pay
        
        managers should maintain close control and supervision, autocratic style- motivate with piece rate
        
        AMAZON- JEFF BEZOS
- - - - Economic responsibilities
      - These include providing rewards to the owners, paying employees fairly and selling products at a fair price to consumers. A business has an economic responsibility to survive.
      - Legal responsibilities
      - This means that businesses should follow the law and not act illegally.
      - Ethical responsibilities
      - A business will have responsibilities over and above their legal requirements. Managers may decide to do the 'right thing'.
      - Philanthropic responsibilities
      - This focuses on businesses actively trying to help society, for example, by improving the quality of each employee’s working life.
- - - - six ways of overcoming resistance to change- education and communication, participation and involvement, facilitation and support, negotiation and agreement, manipulation an cooperation, explicit and implicit coercion
- - - - The willingness to work towards attainment of goal is
      - main source of job motivation. Clear, particular and
      - difficult goals are greater motivating factors than easy,
      - general and vague goals.
      - Specific and clear goals lead to greater output and
      - better performance. Unambiguous, measurable and
      - clear goals accompanied by a deadline for completion
      - avoids misunderstanding.
    - - Goal-setting theory refers to the effects of setting
      - goals on subsequent performance. Locke found that
      - individuals who set specific, difficult goals performed
      - better than those who set general, easy goals. Locke
      - proposed five basic principles of goal-setting: clarity,
      - challenge, commitment, feedback, and task complexity.
- - - - employees can be motivated if they
        
        have a positive correlation between efforts and performance
        
        Favourable performance will result in a desirable reward,
        
        The reward will satisfy an important need,
        
        The desire to satisfy the need is strong enough to make the effort
        worthwhile.
        
        the theory is based on valence, expectancy and instrumentality