unit 3

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  • Created by: brodda221
  • Created on: 12-11-23 17:11
what is a strategic decision
affects the entire business long term impacts e.g. relocation and expansion
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what is a tactical decision
affects several functional areas medium term impacts e.g. Development of a new marketing campaign or what type of market research to undertake
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what is a operational decision
affects one specific area of the business short term impacts e.g. where to source raw materials and staffing rota's
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what are some internal criteria which will be used to affect decision making within the business
attitude to risk-are business owners willing to take high levels of risk to obtain high rewards
Organisational objectives-what is the business trying to achieve
core competencies of the business-the skills that a business is good at
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what are some external criteria which will be used to affect decision making within the business
level and nature of risk- what is the size and the type of risk
impacts of external stakeholders-if external stakeholder's do not agree with the change it could resolve in conflict
changes in the market-meets the need of the market changes
changes in ex
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what is an internal source of information
readily available, low cost but are biased towards internal decision making
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what is an external source of information
provides a lot of information that consider changes in the external environment
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what is an qualitative information
opinion based
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what is an quantitative information
numerical data
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what is an historical information
past information
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what is an forecasted information
information predicting the future
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what is primary research
research collected by the business itself
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what is secondary research
existing information/data collected by someone else
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how do you judge the validity of information
is it reliable
is it relevant
is it up to date
does it have the correct amount of detail
is it free from bias
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the purpose of effective communication
provides information for stakeholders
improves understanding of everyone else's viewpoints
allows negotiation to take place
reduces conflict
reduces resistance to change
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benefits and drawbacks of using an external consultant for decision making
+
specialist knowledge
nonbiased guidance and advice
-
cost
consultant may not fully understand the business and its objectives
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gross profit =
Total reveue - cost of sales
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net profit=
total revenue - total costs
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gross profit ratio=
Gross profit/sales revenue x 100
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net profit ratio=
net profit/sales revenue x 100
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Breakeven point=
fixed costs/(selling price-variable cost per unit)
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limitations of breakeven analysis
prediction
gives no indication of time
ignores inflation
assumes all stock is sold
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unit contribution
selling price-variable cost per unit
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what is payback period
the length of time it takes for a project to recover its initial costs
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what is ARR + formula
the percentage rate of return a business can expect to obtain on average every year
average annual cashflow/initial investment x 100
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what is net present value/ discounted cashflow
calculates the monetary value now of the project's future cash flows
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factors involved in workforce planning
being understaffed
being overstaffed
having a skills mismatch
the size of the workforce
the skills of the workforce
the availability of the workforce
the training needs of the workforce
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what is on the job training
training done while an employee is working
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what is off the job training
training done when not doing their actual job
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what is internal training
on site training
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what is external training
off site training
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what is absenteeism with formula
employees not urning up to work
AR=number of days absent/total number of working days x 100
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what is labour turnover with formula
employees quitting/leaving their job
LTR= number of employees leaving/total number of employees x 100
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what is wastage with formula
they are finished goods that cannot be sold
WR=quality of waste/total output x 100
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what is labour productivity with formula
it is the output per employee
LP=total output/number of employees
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how to use market research information
look for data correlations
make estimations
calculate and interpret moving averages
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what is the botn matrix
it helps a business analise their product range
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what is a cash cow
low market growth high market share
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what is a dog
low market growth low market share
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what is a question mark
high market growth low market share
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what is a star
high market growth high market share
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what is porters 5 forces model
degree of rivalry
threat of new entrants
threats of substitutes
bargaining powers of buyers
bargaining power of supplies
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what is porter's generic competitive strategies
cost leadership
differentiation
cost focus
differentiation focus
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what are considerations when making marketing decisions
target market
product/service features
place/channel of distribution
pricing
promotion
corporate image
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What are some external factors that affect the decision?
legal
ethical
social
political
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What are some internal factors that affect the decision?
financial
time available
corporate policy
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What are some key tasks involved within resource management
physical resources
IT resources
inventory
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what are some project management tools that can be used
project plan
risk register
Gantt chart
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what does a critical path analysis diagram show
the most efficient order to complete activities
indicates earliest start times and latest finishes
shows shortest possible completion time
identifies the critical path
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what are some benefits and drawbacks of CPA
+
helps identify the shortest possible completion time
helps identify critical activities
-
only an estimation
can be time consuming to produce
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what are some causes of change
internal causes- change in ownership, financial constraints
external causes-new legislation and advancing technology
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reasons to resist change
fear
uncertainty
feeling threatned
lack of information about the change
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what is the impact of change
it depends on the size of the change
it has a massive effect on all employees in the organisation whereas a small change may only effect one or two people
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what is a contingency plan
A plan that proposes strategies to deal with potential problems that may occur
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what is proactive and reactive
proactive-anticipating the problem
reactive-thinking of a way to deal with the problem after it has happened
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what is an internal organisation audit
A systematic review of all the internal factors which are relevant to the decision
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what is an external environmental audit
A systematic review of all the external factors which are relevant to the decision
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what is competitor analysis
reviewing the competition
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what is stakeholder analysis
review of the stakeholders
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how does the Ansoff matrix help a business
it helps them to decide whether to sell current or new products within a current or new market
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what are the 4 parts of the Ansoff matrix
market penetration-current product + market
market development- current product and new market
product development new product and current market
diversification-new product + market
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what is horizontal integration
merging or buying out a business at the same stage of the production process
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what is vertical integration
merging or buying out a business at different stage of the production process
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how do you make business decisions
Identify the issues
prioritise the decision making criteria
analysing all relevant information
decision-making tools
matching solutions to decision-making criteria
acknowledging others peoples contribution
conclusion
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how do you justify a business decision
evidence
perspectives and viewpoints
why this is the appropriate action to take
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what is a tactical decision

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affects several functional areas medium term impacts e.g. Development of a new marketing campaign or what type of market research to undertake

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what is a operational decision

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Card 4

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what are some internal criteria which will be used to affect decision making within the business

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what are some external criteria which will be used to affect decision making within the business

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