BUSINESS A LEVEL

1. OPERATION MANAGEMENT

Offshoring
Reasons for:
- Cost reduc6on
- Access to skilled labour
- Market expansion
- Avoiding protec6onist trade barriers

Impact:
- Job displacement
- Increase compe66on
- Communica6on challenges

Reshoring

Reasons for:
- Language
- Product quality and level of service concerns
- Government incen6ves
- Shorter supply chain
- Cost considera6on

Impact:
- Job crea6on
- Innova6on
- Improved quality
- Contribu6ng to GDP

In 2009, the US manufacturing sector was at its lowest job level in recent history—11.5 million jobs.
However, manufacturers were becoming increasingly aware of the inherent drawbacks of
offshoring—e.g., lower product quality, higher process inconsistency, and greater opera6onal
inflexibility.
From 2010 onward, manufacturers in the US and other western countries began to move from
offshoring their opera6ons for lower produc6on costs to reshoring their opera6ons for a lower cost
of ownership.

Outsourcing

- Reduc6on and control of opera6ng cost

- Increased flexibility
- Improved company focusses
- Access to quality service
However,

- Loss of jobs in the business

 - Quality issues
- Security

Factors that influence the scale of a business

- Market demand
- Economies of scale
- Technology and innova6on
- Capital availability
- Government regula6on
- Supply chain efficiency
- Number of compe6tors
- Size of the market
- Owner’s objec6ve

Apple Inc. experienced significant growth in scale due to the high demand for its innova6ve products,
such as the iPhone and iPad.

Internal economies of scale

Technical Economies:
Example: A manufacturing firm may benefit from technical economies by inves6ng in more advanced
machinery or technology. As produc6on levels increase, the average cost per unit can decrease.
Managerial Economies:
Example: As a firm expands, it can afford to hire specialized managers and experts. These individuals
can improve efficiency, streamline opera6ons, and lead to cost savings.
Marke6ng Economies:
Example: Larger firms can spread their adver6sing and marke6ng costs over a greater volume of
output, reducing the average cost per unit. They may nego6ate be_er deals with suppliers due to
larger order quan66es.
Financial Economies:
Example: Larger firms o`en have be_er access to financial markets, allowing them to secure loans at
lower interest rates. This results in lower financial costs per unit of produc6on.

Diseconomies of scale

- Communica6on breakdown
- Loss of flexibility
- Poor coordina6on
Results into:
- Increase cost
- Resource misalloca6on

This could be solved by:

- Decentralisa6on
- Management by objec6ve
- Reduce diversifica6on

The goal for a firm is to find the op6mal scale of produc6on, where economies of scale are
maximized, and diseconomies of scale are minimized.
The rela6onship between scale and unit costs is o`en represented by a U-shaped cost curve. Ini6ally,
as produc6on increases, economies of scale dominate, leading to a decrease in unit costs. However,
beyond a certain point, diseconomies of scale set in, causing unit costs to rise.

Quality importance:

- Customer sa6sfac6on
- Reputa6on
- Compe66ve advantage
- Reduce costs
- Customer loyalty
- Helps prolong product life cycle
- Reduce risk of failure

Quality control
Checking for quality once the produc6on process is completed
Impact:
- Customer sa6sfac6on
- Cost saving
- Opera6onal efficiency (reduce waste)
- Compe66ve advantage

Quality assurance
Checking for quality a`er every produc6on process

Advantage:

- Consistent and predictable quality of products or services

- Reduc6on in defects, waste, and errors
- Increased customer sa6sfac6on and loyalty
- Improved efficiency and produc6vity
- Iden6fica6on of areas for process improvement
- Compliance with regula6ons and standards
- Mo6va6on
- Greater compe66veness

Disadvantage:

- High ini6al investment in resources and training

- Time-consuming and complex process
- May create a bureaucra6c and rigid system
- Can be difficult to measure the effec6veness of quality assurance
- May not be suitable for all industries or types of projects
- Can lead to a false sense of security and complacency

In Nissan car factories, predetermined quality standards are checked at each stage of the assembly of
vehicles by the workers.

Benchmarking

Benefits –
 - Faster & cheaper way of solving problems
- Area of greatest significance for customers can be iden6fies
- Help improve interna6onal compe66veness
- Crossover of ideas while comparisons
- Workforce involved, mo6va6on
Limita6ons –
- Depends on obtaining relevant and up-to-date informa6on
- Merely copying ideas will not help
- Costs of comparisons may not be covered

Computer Aided Design:

- lower product development cost
- increased produc6vity
- improved product quality
- good visualisa6on of final product
- great accuracy
however,
- complexity
- need for extensive training
- could be expensive

Computer aided manufacturing:

- reduced quality problems
- increased labour produc6vity
however,
- cost of training and hardware
- breakdowns can occur

Lean produc6on
The primary aims and purposes of lean produc6on are to eliminate waste, improve efficiency, and
enhance overall produc6vity
Toyota is o`en considered the pioneer of lean produc6on, and its TPS serves as a prominent
example.
- Waste of 6me & resources eliminated
- Reduced unit costs
- High profits
- Easier opera6on, less crowded
- Lesser risk of damage
- Quicker launch of new products

Simultaneous Engineering a method of designing and developing products, in which the different
stages run simultaneously, rather than consecu6vely.
It involves important tasks like essen6al design, market research, cos6ng are done at the same 6me
rather than in a sequence

Kaizen is a Japanese term that means "con6nuous improvement." It involves the con6nuous and
incremental improvement of processes, products, or services.
Quality circles are small groups of employees who voluntarily meet to iden6fy, analyse, and solve
work-related problems, and to improve the overall quality of products and processes.

Cell produc6on
Spliing flow produc6on into self-contained groups that are responsible for whole work units.
Instead of each worker performing a single task, the produc6on line is split into units – cells

Enterprise resource planning: is using dedicated so`ware to integrate orders, materials, labour and
distribu6on to minimise cost, reduce inventory levels and waste
- Helps with inventory control.
- Reduces cost of ordering and holding inventory.
- Links informa6on between departments – management informa6on.
- Choosing best suppliers and most cost-effec6ve suppliers and suppor6ng JIT
manufacturing.
- Alloca6ng jobs to appropriate produc6on employees.
- Forecas6ng demand.
- Improved efficiency in terms of cos6ng and pricing.
- Improved efficiency in terms of capacity u6lisa6on
ERP systems can help manage and track employee skills, making it easier to allocate resources
effec6vely based on project requirements.

2. HUMAN RESOURCE MANAGEMENT

Human resource management is the strategic approach to the effec6ve management of an

organisa6on’s workers so that they help the business gain a compe66ve advantage.

The role of HRM includes recruitment and selec6on appraisal of employees, workforce planning and
training. It is also important to dis6nguish between hard and so` HRM. Hard HRM includes trea6ng
employees as a cost, while so` HRM Includes focusing on training and development, which is a more
democra6c style of leadership.

Different types of structure

Func6onal structure:
This structure organizes employees based on their specific func6ons or roles, such as marke6ng,
finance, opera6ons, and human resources.
Employees focus on specific func6ons, leading to exper6se and efficiency.
Clearly defined roles and responsibili6es with a clear chain of command.
- Clear hierarchy
- Specialisa6on
- Economies of scale
However
- Communica6on barriers
- Lack of flexibility
- Coordina6on is difficult
Matrix structure:
A matrix structure generates two lines of authority, combining the func6onal and product
departments of the organiza6on.
This structure is o`en used in organiza6ons dealing with complex projects, diverse products, or
mul6ple markets
- Flexibility
- Enhanced communica6on
- Specialisa6on and exper6se
- Cross over of ideas between people with specialist knowledge
- Efficient use of resources
- Mo6va6on and team spirit
However
- Increased Complexity
- Conflicts

Hierarchical structure
- Clear chain of command- help in decision making
- Allow specialisa6on- increase efficiency
- Accountability
However
- Communica6on barrier- misunderstandings
- Employees feel demo6vated due to lack of empowerment

Divisional structure

Organises the ac6vi6es of business around geographical areas or product groups

The reasons and ways structures change

1. Growth:
Reasons
- Increased workload
- Global expansion
2. Delayering:
Reasons
- Cost reduc6on
- Increased efficiency
 - Improved communica6on
3. Technology advances
4. Market dynamics
5. Merger and acquisi6on

Delega6on is essen6al for effec6ve organiza6onal func6oning. It allows for the distribu6on of
workload, promotes specializa6on, and enables individuals to focus on their areas of exper6se.
Delega6on is a key element in achieving organiza6onal goals by leveraging the skills and abili6es of
various team members.
The wider the span of control, the greater the degree of delega6on.

Accountability is the obliga6on of an individual to accept responsibility for the outcomes of their
ac6ons or decisions. It involves answering for the results of one's ac6ons, whether they are posi6ve
or nega6ve. Accountability is crucial for maintaining transparency, building trust within the
organiza6on, and ensuring that individuals are held responsible for their assigned tasks. It helps in
evalua6ng performance and learning from successes and failures.
In the context of the delegated project coordina6on task, the team leader is accountable for the
success or failure of the project.

Span of control refers to the number of subordinates or employees that a manager or supervisor can
effec6vely manage and supervise.

Levels of hierarchy, or hierarchy levels, refer to the layers of authority and responsibility within an
organiza6on.

Line managers - are those who have direct authority over others
Staff managers- do not have line authority over others. Are employed to give advice to senior line
manager

There is always poten6al conflict between them due to their professional status and experience

Centralisation
It involves keeping all-important decision-making powers in the head office
- Gives a sense of uniformity and consistency
- Quicker decision making
- Prevents conflicts
- economies of scale
however,
- reduce employee morale

Decentralisation
It involves passing decision making down the organisa6onal structure to empower employees
- Demonstrates trust in employees (mo6va6on)
- Develops and prepares them for more challenging tasks
- Be_er mo6va6on
- Quicker and more flexible decisions
However,
- Risk of loss of control

Mul6na6onal which allows regional and cultural differences to be reflected in a product

Ver6cal communica6on: when people from different levels in a hierarchy communicate each other.
Horizontal communica6on: when people on same level of hierarchy communicate with each other.

Why is effective communication important?

- Higher staff mo6va6on, labour produc6vity
- Improve in the number and quality of ideas generated by the staff
- Speeder decision making
- Quicker response to market changes
- Reduced risks of errors
- Effec6ve coordina6on between departments

Factors influencing choice of appropriate media

- Importance of wri_en record
- Cost
- Advantages to be gained from staff input
- Speed
- Quan6ty of data to be communicated
- Whether or not more than 1 method necessary
- Size and geographical spread
Reducing communication barriers
- Message is clear and precise
- Short communica6on channel
- Clear channels of communica6on
- Build in feedback to the communica6on process
- Establish trust between receiver and sender
- Appropriate physical condi6ons

Leadership theories

Trait theory: it believes that the people are either born with the personality characteris6cs required
for leadership, or they are not.

Trait theory assumes that certain individuals possess inherent quali6es or traits that make them
effec6ve leaders.
Most common leadership traits:
- Ini6a6ve
- Determina6on and energy
- Flexibility
- Crea6vity
- Charishma
- EI
- Confidence, honesty

Example: A leader might be characterized by traits such as confidence, decisiveness, integrity, and
emo6onal intelligence.

Behavioural theory: it assumes that capable leaders can learn the skills needed rather than having
inherent quali6es.

- Technical skills (knowledge)

 - Human skills (able to interact with others)
- Conceptual skills (ideas to solve problem)

Con6ngency theory: suggests that most successful leaders adapt their leadership style to different
situa6ons. Fiedler's Con6ngency Model suggests that a leader's effec6veness depends on the degree
of match between their leadership style (task-oriented or rela6onship-oriented) and the favourability
of the situa6on.

Power and influence theory:

Power and influence theories examine how leaders use power and influence to affect the behaviour
of their followers. Power can be derived from various sources, and leaders may use different
strategies to influence others.

Transforma6onal leadership focuses on inspiring and mo6va6ng followers to achieve extraordinary

outcomes. It involves crea6ng a vision, fostering a posi6ve organiza6onal culture, and encouraging
innova6on.

Someone's emotional intelligence is their capability to perceive, understand and use emo6ons to
communicate effec6vely with others.
- Self-awareness: Understanding one's own emo6ons and recognizing their impact on
thoughts and behaviour.
- Self-management: being able to recover quickly stress, being trustworthy, showing
ini6a6ve and self-control
- Social awareness: it's the capability to perceive and understand other people's emo6ons,
as well as appropriately respond to them.
- Social skills: Managing rela6onships effec6vely. This includes communica6on skills,
conflict resolu6on, and the ability to work well in a team.

Hard HRM
- It focuses on cost cuing
- Treats workers as machines
- Focuses on short term contracts
- Includes autocra6c leadership and has a tall hierarchy
The hard HRM used helps save money but only in the short run

Soft HRM
- It focuses on developing workers
- Ensures they are mo6vated and reach self-fulfilment
- Treats workers are the most important business resource
- Includes democra6c leadership and a flat organisa6onal structure

Management by objectives (MBO) is a process in which a manager and an employee agree on

specific performance goals and then develop a plan to reach them.
Usefulness:
- Clarity and focus
- Mo6va6on
- Improved communica6on
- Employment development
- Improves performance
However
 - Time consuming
- Objec6ves become outdated quickly
- Does not guarantee success

Causes and consequences of poor employee performance

Causes:
- Lack of clear expecta6ons
- Inadequate training and development
- Poor management and leadership
- Health issues
- Lack of resources
- Poor work environment
- Communica6on barriers
Consequences:
- Decrease produc6vity
- Low moral and mo6va6on
- Increased turnover
- Customer dissa6sfac6on

Strategies to improve employee performance

- Regular appraisal of performance against predefined targets
- Training
- Quality circles
- Cell produc6on
- Financial incen6ves
- Advanced technology
- Management by objec6ves
- Regular feedback
- Work life balance

Workforce planning: WP ensures right number of employees with the right skills in the
right place at the right 6me to deliver the services sold.
- Efficient alloca6on of resources
- Facilitated strategic decision making
However
- May be impacted by unforeseen external factors

3. MAREKTING

Marke6ng strategy tends to outline how it intends to achieve its marke6ng objec6ves, through the
use of marke6ng mix which are product price promo6on and place, and marke6ng budget available

Elas6city measures play a crucial role in influencing various business decisions, as they help
businesses understand how changes in one variable impact another.
Process of NPD
1. Genera6ng new ideas
2. Idea screening- eliminate those ideas that stand the least chance of being commercially
successful
 3. Concept development and tes6ng - Ask key ques6ons about the features of the product, cost
to make, who are its target market, how much will consumers pay, etc
4. Business analysis - Consider the likely impact of the new product on costs, sales and profits.
Set an es6mated price for the product. Iden6fy the es6mated sales volume and market
share, break-even point
5. Product tes6ng - Involves checking the technical performance of the product. Whether or
not customer expecta6ons will be met
6. Test marke6ng - Introduce the product to a limited market to observe real-world reac6ons
and assess market acceptance.
7. Commercialisa6on - Full scale launch of the product. Introduc6on stage of the PLC. Filled up
distribu6on channels. Crucial 6me in the PLC

Sales Forecasting
- Reduced risks
- The produc6on department is aware of the number of units required
- The marke6ng department is aware of the number of units to be distributed
- Accurate workforce planning
- Accurate cash flow forecasts and planning
- Forecasts may not be completely accurate due to the dynamic business environment.
- Based on market research – primary and secondary
- Exis6ng products – ask expert opinion/use past sales to forecast future

Without proper forecas6ng, the company might overproduce or underproduce, leading to either
excess inventory or stockouts.
Accurate sales forecasts are essen6al for es6ma6ng revenue and alloca6ng resources to different
departments. This helps in seing realis6c financial goals and managing expenditures effec6vely.

Qualita6ve sales forecas6ng

1. Jury of experts: In this method, experts within the organiza6on, such as sales managers or
industry specialists, provide their opinions on future sales based on their knowledge and
experience.
2. Delphi method: Long range of qualita6ve forecas6ng which obtains forecasts from a panel of
experts. They are anonymous
3. Sales-force composite: Add individual predic6ons of future sales of all sales representa6ves
in the business. Sales force representa6veness is required to keep close contact with
consumers – retails, wholesalers. Allows them to understand market trends and es6mate
future demand

Quan6ta6ve sales forecas6ng methods

1. Time series analysis

Sales forecas6ng in this is based on past sales data.
For example, if sales forecast is showing a downturn or downward trend then:

Marke6ng: reduce prices, increase promo6onal spending, widen channel of distribu6on, NPD.
Opera6on: reduce risk of excess capacity, keep inventory level low.
Finance: seek short term financing, reduce cash ouqlow
Human resource: plan for successful employment contracts and redundancies

Marketing planning
 - Clear objec6ves
- Efficient alloca6on of resource
- Coordina6on
- Measurement and evalua6on
- Reduce risk of failure
- Improves communica6on
- Used to convince poten6al investors
- Marke6ng plans reduce the risk of failure during new product development and entering
a new market
- Planning is essen6al, allows SMART objec6ves to be set
- Provide direc6on and purpose
However,
- Complex
- Costly
- Time consuming
- Dynamic market – quickly outdated
- Inflexibility

Pan-global marketing
It involves adop6ng a standardised product across the globe as if the en6re world were a single
market – selling the same goods in the same way everywhere

Global localisation
It involves adap6ng the marke6ng mix, differen6ated products to meet na6onal and regional tastes
and cultures

Why product fail after reaching to commercialisation stage

- Inaccurate market research
- Poor marke6ng support
- Inappropriate pricing
- Changes in technology
- Compe6tors produce product that consumer prefer

Research and development

- New product possibili6es
- Successful and product innova6on
- Allow business to grow and survive
- Can charge premium prices
- Compe66ve advantage
- Long term sustainability
- Global expansion
- Risky investment
- Expensive
- Time consuming

Two types of strategy:

Offensive strategy- to lead the rest of the industry with innova6ve product. aim is to gain market
share and market Dominance
Example: apple
Defensive strategy- to learn from ini6al innovators mistakes and weaknesses. Aims to improve
original product

A coordinated marketing strategy is essen6al for businesses seeking to achieve their goals and
effec6vely promote their products or services in a compe66ve market. This approach involves
aligning various elements of marke6ng to work together seamlessly, ensuring consistency and
maximizing the impact of each component.

- ensures a consistent brand image across all channels.

- Efficient resource alloca6on
- targeted communica6on
- creates synergy.
- allows for quicker adapta6on to changing market condi6ons.
- cohesive customer experience
- compe66ve advantage
- allows for long term plan

It includes 4Ps and 4Cs

Information technology IT and artificial intelligence AI

IT applica6on in marke6ng
Internet, mobile, Email, social media - gives large base of customers- share informa6on-
generate sales

AI applica6on in marke6ng
Gain understanding on customer buying and behaviour
Able to analyse real 6me data improving customer experience
Predict future trends

Main differences between international markets:

- economic and social differences
- legal differences
- cultural differences

Selec6ng the method for entry into interna6onal market

- expor6ng
- interna6onal franchising
- joint venture
- licensing
- direct investment

4. FINANCE AND ACCOUNTING

Income statement
- Performance measurement
- Decision making
- Future planning – budge6ng
- Comparison and benchmarking
Statement of financial position
- Liquidity and solvency evalua6on
- Decision making

Inventory valuation is an accoun6ng prac6ce that is followed by companies to find out the value
of unsold inventory stock at the 6me they are preparing their financial statements

Deprecia6on allows businesses to spread the cost of physical assets (such as a piece of machinery or
a fleet of cars) over a period of years for accoun6ng and tax purposes.
Instead of realizing the en6re cost of an asset in year one, companies can use deprecia6on to spread
out the cost and match deprecia6on expenses to related revenues in the same repor6ng period.

LIQUIDITY RATIO:
The current ra6o provides insight into a company's short-term liquidity posi6on. A ra6o above 1
indicates that the company has more current assets than current liabili6es, sugges6ng it may be able
to meet its short-term obliga6ons. However, a very high ra6o may imply that the company is not
efficiently using its resources.
A current ra6o significantly below 1 may indicate poten6al liquidity problems, as the company may
struggle to meet its short-term obliga6ons.

The acid-test ra6o is a measure of a company's ability to pay off its short-term liabili6es without
relying on the sale of inventory. A ra6o of 1 indicates that the company has just enough liquid assets
to cover its current liabili6es. Ra6os below 1 suggest poten6al liquidity problems, as the company
may struggle to meet its short-term obliga6ons. On the other hand, a ra6o significantly higher than 1
may indicate that a company is very liquid, but it could also suggest that the company is not
efficiently using its resources.

PROFITABILITY RATIO:

A high ROCE indicates that a company is efficiently u6lizing its capital to generate profits. High ROCE
is generally considered a posi6ve sign, as it reflects strong financial performance.
A low ROCE may indicate that the company is not effec6vely using its capital to generate profits.
It could suggest inefficiencies in opera6ons or that the company has a high level of debt rela6ve to its
profits.
A declining ROCE over 6me may be a cause for concern, and further analysis is needed to iden6fy the
underlying issues.

FINANCIAL RATIO:

Financial efficiency refers to the ability of a company or organiza6on to manage its resources in a way
that maximizes output or performance rela6ve to its input or cost.
Indicator of how efficiently the business is using its resources

Inventory turnover Records the number of 6mes inventory is bought and resold
Higher the number, more efficient while a lower ra6o may suggest overstocking or slow sales.

Trade receivable turnover ra6o measures how long it takes for a business to recover payments from
trade receivables
Shorter, the be_er as it indicates be_er control over working capital

Trade payable turnover ra6o

Indicates a shorter 6me taken to pay trade payables, which may suggest good liquidity but could also
imply missed opportuni6es to benefit from extended payment terms. longer 6me to pay trade
payables, which may indicate liquidity issues or strategic use of credit terms.

GEARING RATIO
It measures the degree to which the capital of the business is financed from long-term loans
The ra6o indicates the level of which the company’s assets are financed from external long-term
borrowing

A high gearing ra6o suggests that a significant por6on of the company's capital comes from debt.
Higher the ra6o, greater is the risk
Risk arises from 2 reasons:
- Higher the borrowing, more interest must be paid
- Interest s6ll has to be paid
A low gearing ra6o indicates that the company relies more on equity financing. Low gearing ra6o
indicates a safe business strategy

INVESTMENT RATIO
The term "return to investors" refers to the financial gains or benefits that investors receive from
their investment in a par6cular asset, such as stocks, bonds, real estate, or a business.

Dividend yield is a financial ra6o that indicates the annual dividend income a shareholder can expect
to receive from an investment, rela6ve to its current market price.
Dividend yield ra6o shows rate of return to shareholders at current market share price

(Current Market Price per Share /Annual Dividend per Share) ×100

A high dividend yield may suggest that the stock is undervalued or that the company is returning a
significant por6on of its profits to shareholders.
A low dividend yield may indicate that the stock is overvalued or that the company is reinves6ng its
profits back into the business rather than distribu6ng them as dividends.

Dividend cover, also known as dividend coverage ra6o, is a financial metric that assesses a company's
ability to pay dividends to its shareholders based on its earnings. It is a measure of how well a
company's earnings cover its dividend payments.

A ra6o greater than 1 implies that the company is earning more than it is paying out in dividends. If
the ra6o is less than 1, it suggests that the company is paying out more in dividends than it is earning
in profits. This situa6on may not be sustainable in the long term. A ra6o of 1 means that the
company's earnings exactly cover its dividend payments

Price/earnings ra6o: It reflects the confidence the investors have in future prospects of the business
Higher P/E ra6o, investors expect higher earnings growth
Investors are willing to pay a premium for the stock.

INVESTMENT APPRAISAL
Is a way that a business will assess the a_rac6veness of possible investments or projects based on
the findings of several different capital budge6ng and financing techniques.
It helps managers understand whether future returns will be greater than the costs and by how
much

The payback period is the length of 6me it takes for the net cash inflows to pay back the original
capital cost of investment
Longer the payback period, more uncertain the investment is
Shorter payback periods are generally preferred because they indicate a quicker recovery of the
ini6al investment.

ARR measures the annual profitability of an investment as a percentage of the ini6al investment
A higher ARR is usually preferred, as it implies a higher average accoun6ng profit rela6ve to the
investment.

The Net Present Value represents the difference between the present value of cash inflows and the
present value of cash ouqlows over a specific period. A posi6ve NPV indicates that the investment is
expected to generate more cash than the cost of the investment, making it poten6ally profitable. On
the other hand, a nega6ve NPV suggests that the investment may not be financially sound.

5. BUSINESS AND ITS ENVIRONMENT

Privatisation
- Efficiency- Cost reduc6on
- Access to capital
- Profit mo6ve- innova6on- invest on r&d- be_er quality
- Increase compe66on- lower prices
- Increase government revenue
- Inequality
- Job losses- unemployment concerns
- Monopoly abuse
- Reduce accountability

Nationalisation
- Social welfare
- Promo6ng equal access- equitable distribu6on of wealth and resources
- Inefficiency
- Lack of compe66on

How a government might use the law to seek to control:

- employment prac6ces, condi6ons of work (including health and safety), wage levels,
marke6ng behaviour, compe66on, loca6on decisions, par6cular goods and services
Government intervention in encouraging enterprise
1. Grants and subsidies
2. Tax reduc6on
3. Streamlining regula6on
4. Training programs
5. Offering loan guarantee scheme
 6. Providing informa6on

CSR
- Time consuming
- Costly
- Lack of transparency and accountability

Social audit includes:

- A health and safety record
- Pollu6on levels
- Employee benefit scheme
- Feedback from customers and suppliers on ethical nature

Multinational companies
- Generate employment
- Bring FDI- boost Economic growth
- Infrastructure development
- Bring advanced technology
- Higher efficiency- Increased produc6vity
- Economies of scale- lower prices
- Access to global market
- Contribute to government revenue
However
- Income inequality
- Resource exploita6on
- Culture differences
- Diseconomies of scale

Sustainability
- Enhanced brand image
- Customer loyalty
- Cost saving
- A_ract investors- be_er access to capital
- Compe66ve advantage

Impact on business of technological change

- New product
- New processes
- Reduce cost
- Be_er communica6on
- More informa6on

Corporate culture
- Unite employees
- Provide sense of iden6ty
- Influence work ethics, collabora6on
- Foster innova6on
- Ensures consistency
- Value employee empowerment- decentralised decision making
- Enhance employee morale- increases produc6vity- posi6ve brand image
Transformational leadership
- Inspira6on and vision
- Crea6vity and innova6on
- Promotes employee engagement
- Empowerment- increased produc6vity
- Posi6ve culture- higher job sa6sfac6on- reduce turnover

Strategic analysis is a process that involves researching an organiza6on's business environment

analysis within which it operates.

APPROCHES TO DEVELOP MARKET STRATEGY

Corporate social responsibility
- Greater brand loyalty
- Increased sales
- Be_er employee reten6on and improved recruitment
- Provides a USP to HD
- Reduced pressure from pressure groups

Blue ocean strategy

It encourages businesses to explore and create new markets rather than ba_ling with compe6tors in
exis6ng markets.
Stop compe6ng, start crea6ng.
High product differen6a6on and low cost.
High research and development cost

A framework for sustainable growth, innova6on and compe66ve advantage

Critical path analysis

CPA sets out order and 6mes of ac6vi6es.
CPA sets out earliest start and latest finish 6mes and gives cri6cal path.
Sets target to work towards
CPA enables decisions on how to minimise chance of delays
List all the ac6vi6es that need to be completed for the project.
Determine the dependencies between ac6vi6es (i.e., which ac6vi6es must be finished before others
can start).

For large and complex projects, the network diagram and calcula6ons involved in Cri6cal Path
Analysis can become intricate and 6me-consuming.
The method assumes fixed dura6ons for ac6vi6es, which may not always reflect real-world
uncertain6es and varia6ons.
It does not include unexpected event or delay by suppliers or other ac6vi6es.

Scenario planning

SWOT analysis
SWOT analysis is a tool that assists you to assess the Strengths, Weaknesses, Opportuni6es, and
Threats involved in any organiza6on. It can aid you to obtain insights from prior situa6ons and figure
out possible outcomes to prevailing or poten6al problems.

PEST analysis
Porter’s five forces
Porter's five forces refers to a framework that examines the level of compe66on within an industry
by analysing five key forces: the threat of new entrants, the bargaining power of suppliers, the
bargaining power of buyers, the threat of subs6tute products or services, and the intensity of
compe66on.
By analysing these five forces, companies can develop a be_er understanding of the compe66ve
dynamics of the industry and make strategic decisions accordingly.

Core competence framework

A company focuses on its core competencies, the unique capabili6es that give it a compe66ve
advantage. Google's core competency in search technology has been leveraged to expand into
various related areas like online adver6sing, mobile opera6ng systems, and cloud services.

Ansoff matrix
Market Penetra6on:
This strategy involves increasing sales of exis6ng products in exis6ng markets.

Market Development:
This strategy involves introducing exis6ng products to new markets or expanding the reach of
exis6ng products.
Usefulness: It's useful when a company wants to tap into new customer segments or geographical
markets

Product Development:
This strategy involves crea6ng and introducing new products to exis6ng markets.

Diversifica6on:
This strategy involves introducing new products to new markets, o`en represen6ng a high-risk/high-
reward scenario.

Decision trees
Decision trees are easy to understand and interpret. They represent decisions and their possible
consequences in a visual and intui6ve manner.
The tree structure allows users to follow the decision-making process step by step.
They help in choosing the most appropriate course of ac6on based on the available data.