Podcast
Questions and Answers
Which of the following best describes the superordinate objective of a business?
Which of the following best describes the superordinate objective of a business?
- Maximizing employee satisfaction and well-being.
- Maintaining ethical standards, regardless of financial impact.
- Contributing to social causes and community development.
- Achieving long-term survival and sustainable growth. (correct)
A company's ability to charge premium prices for its products is most directly supported by which business objective?
A company's ability to charge premium prices for its products is most directly supported by which business objective?
- Achieving Greater Customer Satisfaction
- Reducing Capital Costs
- Lowering Operating Costs
- Offering Higher Quality Products and Services (correct)
What is the most direct benefit of achieving greater customer satisfaction for a business?
What is the most direct benefit of achieving greater customer satisfaction for a business?
- Increased likelihood of repeat purchases and positive referrals. (correct)
- Simplified supply chain management and logistics.
- Reduced need for market research and product development.
- Lower operating costs due to decreased marketing efforts.
In the context of business objectives, reducing capital costs primarily leads to:
In the context of business objectives, reducing capital costs primarily leads to:
Which aspect of a business stands to benefit most directly from reduced lead times?
Which aspect of a business stands to benefit most directly from reduced lead times?
What encompasses the 'business environment' according to the definition provided?
What encompasses the 'business environment' according to the definition provided?
Which level of the business environment includes elements such as political, economic, socio-cultural, and legal factors?
Which level of the business environment includes elements such as political, economic, socio-cultural, and legal factors?
A company operating in multiple countries must adapt its strategies to different cultural norms. Which feature of the business environment does this demonstrate?
A company operating in multiple countries must adapt its strategies to different cultural norms. Which feature of the business environment does this demonstrate?
The introduction of a new technology that disrupts existing business models highlights which characteristic of the business environment?
The introduction of a new technology that disrupts existing business models highlights which characteristic of the business environment?
A small local business being affected by new national regulations exemplifies which feature of the business environment?
A small local business being affected by new national regulations exemplifies which feature of the business environment?
According to the definition provided, what is the primary focus of strategic management?
According to the definition provided, what is the primary focus of strategic management?
What is the main purpose of strategies, as defined by Mintzberg?
What is the main purpose of strategies, as defined by Mintzberg?
In the strategic management process, what activity directly follows environmental analysis?
In the strategic management process, what activity directly follows environmental analysis?
Which strategic management process component involves monitoring and evaluating the effectiveness of implemented strategies?
Which strategic management process component involves monitoring and evaluating the effectiveness of implemented strategies?
What is the primary purpose of conducting environmental analysis in strategic management?
What is the primary purpose of conducting environmental analysis in strategic management?
What is the primary focus of the 'Political' aspect within a PESTLE analysis?
What is the primary focus of the 'Political' aspect within a PESTLE analysis?
Which element of the PESTLE framework considers inflation rates, economic growth, and exchange rates?
Which element of the PESTLE framework considers inflation rates, economic growth, and exchange rates?
Analyzing consumer attitudes, opinions, and lifestyle trends falls under which component of PESTLE?
Analyzing consumer attitudes, opinions, and lifestyle trends falls under which component of PESTLE?
Which aspect of PESTLE analysis incorporates elements such as innovation, technological changes, and the level of research funding?
Which aspect of PESTLE analysis incorporates elements such as innovation, technological changes, and the level of research funding?
Compliance with employment, competition, and health and safety laws is assessed under which element of a PESTLE analysis?
Compliance with employment, competition, and health and safety laws is assessed under which element of a PESTLE analysis?
Which element of the PESTLE framework focuses on climate change and sustainable practices?
Which element of the PESTLE framework focuses on climate change and sustainable practices?
What does Porter's Five Forces model primarily help an organization to determine?
What does Porter's Five Forces model primarily help an organization to determine?
In Porter's Five Forces, which force considers the likelihood of new companies entering the market?
In Porter's Five Forces, which force considers the likelihood of new companies entering the market?
If a company's suppliers have the ability to dictate prices, which of Porter's forces is high?
If a company's suppliers have the ability to dictate prices, which of Porter's forces is high?
Which of Porter's Five Forces is most directly affected by the availability of similar products that a customer can switch to?
Which of Porter's Five Forces is most directly affected by the availability of similar products that a customer can switch to?
Which of Porter's Five Forces is most closely associated with the intensity of competition among existing firms in an industry?
Which of Porter's Five Forces is most closely associated with the intensity of competition among existing firms in an industry?
Which internal analysis tool helps an organization identify its Strengths, Weaknesses, Opportunities, and Threats?
Which internal analysis tool helps an organization identify its Strengths, Weaknesses, Opportunities, and Threats?
In a SWOT analysis, which elements are considered external factors that can affect an organization?
In a SWOT analysis, which elements are considered external factors that can affect an organization?
The VRIO framework is used to determine if a resource can provide a sustainable competitive advantage. What does VRIO stand for?
The VRIO framework is used to determine if a resource can provide a sustainable competitive advantage. What does VRIO stand for?
Using the VRIO framework, a resource that is not valuable would result in what?
Using the VRIO framework, a resource that is not valuable would result in what?
Which internal analysis tool examines the activities within a business to identify ways to improve efficiency and provide the most value at the lowest cost?
Which internal analysis tool examines the activities within a business to identify ways to improve efficiency and provide the most value at the lowest cost?
According to the BCG Matrix, products with high market share in a low-growth market are classified as:
According to the BCG Matrix, products with high market share in a low-growth market are classified as:
A company has a product that requires significant investment to maintain its market share, but it also generates substantial revenue. According to the BCG matrix, this product would be classified as a:
A company has a product that requires significant investment to maintain its market share, but it also generates substantial revenue. According to the BCG matrix, this product would be classified as a:
In the Ansoff Matrix, what strategy involves selling existing products in new markets?
In the Ansoff Matrix, what strategy involves selling existing products in new markets?
A company decides to introduce a new product to a new market. According to the Ansoff Matrix, which growth strategy are they pursuing?
A company decides to introduce a new product to a new market. According to the Ansoff Matrix, which growth strategy are they pursuing?
What is the primary goal of a 'Blue Ocean Strategy'?
What is the primary goal of a 'Blue Ocean Strategy'?
Which element of the ERRC (Eliminate-Reduce-Raise-Create) framework focuses on developing entirely new aspects that have not been offered before?
Which element of the ERRC (Eliminate-Reduce-Raise-Create) framework focuses on developing entirely new aspects that have not been offered before?
Which management tool helps companies improve internal business operation and external results by balancing financial, customer, internal processes, and learning and growth perspectives?
Which management tool helps companies improve internal business operation and external results by balancing financial, customer, internal processes, and learning and growth perspectives?
What does 'SMEAC' primarily aim to ensure in military and business planning?
What does 'SMEAC' primarily aim to ensure in military and business planning?
In the Gap Analysis process, what is the first key step?
In the Gap Analysis process, what is the first key step?
What is McKinsey's 7-S framework used for?
What is McKinsey's 7-S framework used for?
In strategic risk management, what is the process of evaluating and preparing for potential obstacles to a company's success?
In strategic risk management, what is the process of evaluating and preparing for potential obstacles to a company's success?
Flashcards
What is Profit?
What is Profit?
The primary aim of every business; where businesses obtain funds for personal savings and covering daily operational expenses.
What is Greater Customer Satisfaction?
What is Greater Customer Satisfaction?
Achieved when customers are pleased with the products/services, leading them to return and recommend to others.
What are Higher Quality Products & Services?
What are Higher Quality Products & Services?
Products of superior grade that increase customer satisfaction, decrease costs from returns, and boost profitability.
What are Lower Operating Costs?
What are Lower Operating Costs?
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What are Lower Capital Costs?
What are Lower Capital Costs?
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What are Shorter Lead Times?
What are Shorter Lead Times?
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What is Business Survival?
What is Business Survival?
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What is the Business Environment?
What is the Business Environment?
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What is the Dynamic Nature (of a Business Environment)?
What is the Dynamic Nature (of a Business Environment)?
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What is Uncertainty and Complexity (of a Business Environment)?
What is Uncertainty and Complexity (of a Business Environment)?
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Relativity (of the Business Environment)
Relativity (of the Business Environment)
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Inter-relationship (of the Business Environment)
Inter-relationship (of the Business Environment)
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External Control (of the Business Environment)
External Control (of the Business Environment)
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Long-term/Short-term Impact (on the Business Environment)
Long-term/Short-term Impact (on the Business Environment)
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Universal Impact (on the Business Environment)
Universal Impact (on the Business Environment)
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Multi-dimensionality (of the Business Environment)
Multi-dimensionality (of the Business Environment)
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What is Strategic Management?
What is Strategic Management?
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What is Strategy?
What is Strategy?
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Environmental Analysis
Environmental Analysis
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Strategy formulation
Strategy formulation
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Strategy Implementation
Strategy Implementation
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Strategy Evaluation & Control
Strategy Evaluation & Control
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What is PESTLE?
What is PESTLE?
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What are Porter's Five Forces?
What are Porter's Five Forces?
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What is a SWOT analysis?
What is a SWOT analysis?
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What is RBV and VRIO?
What is RBV and VRIO?
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Value Chain Analysis
Value Chain Analysis
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What is the BCG Matrix?
What is the BCG Matrix?
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What is the Ansoff Matrix?
What is the Ansoff Matrix?
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What is Porter's Generic Strategies?
What is Porter's Generic Strategies?
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What is Blue Ocean Strategy?
What is Blue Ocean Strategy?
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What is the Balanced Scorecard (BSC)?
What is the Balanced Scorecard (BSC)?
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What are Key Performance Indicators (KPIs)?
What are Key Performance Indicators (KPIs)?
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What does SMEAC stand for?
What does SMEAC stand for?
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What is OKRs?
What is OKRs?
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What is Gap Analysis?
What is Gap Analysis?
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What is McKinsey's 7-S Framework?
What is McKinsey's 7-S Framework?
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Strategic Risk Management
Strategic Risk Management
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Supply Chain
Supply Chain
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Primary Purpose of a Supply Chain
Primary Purpose of a Supply Chain
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Product Based
Product Based
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Study Notes
Business Objectives
- The main aim of every business is to gain profit for personal savings and operational costs.
- Customer satisfaction is key, satisfied customers return and refer others.
- High-quality products drive customer satisfaction, reduce return costs, and allow premium pricing for boosted profitability.
- Lower operating costs save money to focus on improving the business.
- Lower capital costs reduce expenses of borrowing and acquiring assets, improving cash flow and investment.
- Shorter lead times enable quick product delivery to the market.
- Survival in a competitive market is every business's long-term goal.
Business Environment
- Physical and social factors are considered in decision-making within an organization, as defined by Duncan in 1972.
- Macro environment: encompasses environmental, political, economic, socio-cultural, technical and legal factors.
- Micro environment: includes Competitors, Customers, Stakeholders and Media
- Organizational environment: Includes Resources, Behaviour, Structure and Culture
Features of Business Environment
- Dynamic Nature: Constantly changes due to economic, social, technological, and political factors
- Uncertainty and Complexity: Involves multiple interrelated factors making it hard to predict environmental changes and stakeholder interests
- Relativity: Its impact varies across different industries and geographical locations.
- Inter-relationship: Environmental elements are interconnected.
- External Control: Limited control; adaptation is key.
- Long & Short-term Impact: Environmental changes can have immediate or long-term effects.
- Universal Impact: Affects all organizations
- Multi-dimensionality: Includes economic, social, technological, political, and legal dimensions
Strategic Management
- Strategic management involves major initiatives taken by managers to enhance firm performance, according to Nag, Hambrick, and Chen in 2007.
- Strategy: Chandler (1962) defined it as determination of long-term goals, actions, and resource allocation to meet those goals.
- Mintzberg: Strategies set direction, focus efforts, clarify the organization, and provide consistency.
Strategic Management Process
- Environmental Analysis: Understanding the business landscape.
- Strategy Formulation: Deciding how the organization will fulfill its mission.
- Strategy Implementation: Aligning resources towards objectives.
- Strategy Evaluation & Control: Monitoring strategy effectiveness.
Environmental Analysis: External Analysis Tools
- PESTLE: A tool to analyze Political, Economic, Social, Technological, Legal, and Environmental factors affecting an organization.
- Porter's Five Forces: A model identifying the competitive forces shaping an industry to determine its strengths and weaknesses.
- Define the industry
- Identify key players
- Assess strategic strengths
- Analyze the industry structure
- Evaluate the competitive forces
- Identify factors that you have some control over
Environmental Analysis: Internal Analysis Tools
- SWOT Analysis: Identifies Strengths, Weaknesses, Opportunities, and Threats for strategic planning and decision-making.
| Helpful to Achieve the Objective | Harmful to Achieving the Objective | |
|---|---|---|
| Internal Origin (Attributes of the Organization) | Strengths | Weakness |
| External Origin (Attributes of the Environment) | Opportunities | Threats |
- RBV and VRIO: A theory that Valuable, Rare, Inimitable resources and organization (VRIO) lead to competitive advantage.
- Value Chain Analysis: Strategic process to improve products/services by optimizing production efficiency.
- Optimizing production efficiency to ensure that a company can provide the highest possible value at the lowest possible cost
- Includes firm infrastructure, HR management, technology development and procurement
- Marketing includes inbound and outbound logistics, marketing and sales and service
Strategy Formulation
-
BCG Matrix: A planning tool using graphical representations to decide whether to keep, invest in, or sell products/services. The matrix consists of Stars, Cash Cows, Question Marks and Dogs
- Stars: High market growth and share, leaders in fast-growing markets, require investment to sustain growth and generate substantial revenue
- Cash Cows: low growth, high share, generates consistent cash flow with minimal investment.
- Question Marks: high growth, low market share require investment to increase market dominance, can become "stars" or "dogs".
- Dogs: Low growth and low market share, have little potential and are phased out.
-
Ansoff Matrix: A planning tool with a framework for future business growth strategies.
-
Market penetration: Increase sales of existing products in existing markets
-
Market development: Sell existing products in to new markets
-
Product development: Introduce new products in to an existing market
-
Diversification – enter a new market with new products
-
Porter's Generic Strategies: How a company pursues competitive advantage (lower cost, differentiation, or focus).
-
Blue Ocean Strategy: Creates new market spaces instead of competing in existing markets. The ERRC framework to achieve this is: Eliminate, Reduce, Raise, and Create.
- Eliminate: Remove factors the industry takes for granted
- Reduce: Cut down on over-designed factors
- Raise: Enhance key factors that customers value
- Create: Develop new elements not offered before
Strategy Implementation
- Balanced Scorecard: A metric to improve business performance.
- Finance: Revenue Growth and Profitability
- Customer: Satisfaction and Retention
- Internal Processes: Operational efficiency and quality
- Learning & Growth: Employee Skills and technology adoption
- Key Performance Indicators (KPIs): Metrics for progress toward an intended result.
- Financial KPIs: Revenue growth, profit margins, Return on Investment
- Operational KPIs: Production Efficiency and defect rates
- Customer KPIs: Customer satisfaction score, Net Promoter Score
- Employee KPIs: Turnover Rate and Productivity Metrics
- SMEAC: A structured approach for clear communication and efficient execution of objectives. SMEAC: Situation, Mission, Execution, Administration and Command
- Objectives & Key Results (OKRs): A goal-setting framework to define measurable goals and track outcomes.
Strategy Evaluation and Control
- Gap Analysis: Identifies the difference between the current and desired state of a business.
- McKinsey's 7S Framework: A model assessing organizational change composed of Strategy, Structure, Systems, Shared Values, Skills, Staff and Style.
- Strategic Risk Management: Involves identifying, assessing, and mitigating potential risks in strategy implementation.
- Operational Risks, Financial Risks, Market Risks and Compliance Risks
Organizational Context
- Determinants of Manager-Engineer Roles:
- Business Function: Design, manufacturing, distribution, support.
- Location in Supply Chain.
- Type of Organization.
- Supply Chain: A system moving products/services from supplier to customer. It includes Suppliers, Purchasing, Production, Distribution and Customers.
- Internal Chain: supplier/customer relationship between internal organization functions
- External Chain: supplier/customer relationship with external suppliers and customers
Complex Supply Chain
- The Primary Purpose: Satisfy customer needs while generating profits.
- The Process Flow: Begins with customer order and completes when payment is fulfilled.
- Key Participants: Manufacturers, suppliers, transporters, warehouses, retailers, and customers are all key.
- Internal Functions: all processes related to receiving/fulfilling requests (Manufacturing, logistics, sales).
Types of Organizations
- Product Based: Produces a range of products in high volumes; engineering devoted to manufacturing and distribution.
- Project Based: Produces complex products in low volumes with engineering devoted to support functions.
Product-Based Company
- 20% of the work is focused on Design and Production Engineering.
- 80%: Production and Purchasing
- Examples include smart phones, laptops, makeup, and snacks
Project-Based Company
- Higher % of work focused on design and engineering
- Support functions added for maintenance needs
- The process consists of Design, Production Engineering, Production, Distribution and Support
- Examples include satellites, trains, luxury homes, and large container ships
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Description
Explore business objectives: profit, customer satisfaction, quality, and efficiency. Understand the business environment including macro and micro factors influencing decision-making and survival in competitive markets. Learn about Duncan's 1972 definition of physical and social factors.
