Chapter 2 - Overall Organisation Performance
Micro Environment
- Includes 8 business functions:
1. Purchasing department
2. Production department
3. Financial function
4. Marketing department
5. Public Relations
6. General Management
7. Administrative Function
8. Human resources/ Human Capital function
Market Environment (external)
- Includes Porter’s six forces model:
- Power of competitors
- Threat of new entrants
- Substitute products
- Power of buyers
- Power of suppliers
- Impact of complementary products
Macro Environment (external)
- Includes PE2STLE:
- Political Factors
- Economic Factors
- Ethical Factors
- Social Factors
- Technological Factors
- Legal Factors
- Environment Factors
Importance of creative thinking/problem solving techniques to identify strategies to improve
overall performance of business:
- To solve problems, think as if there’s no box (creativity)
- (not good enough to bring old solutions to the table)
Creative Thinking: identifying problem consumer isn’t aware of (or is ---> through
complaining’/ taking business elsewhere) and finding ways to solve problem
Power of consumer: (Porter’s model)
Unhappy customer = no customers & deteriorated performance for business
, Aim of creative solutions:
- To create & maintain competitive advantage
- Product life cycles are becoming shorter and business must constantly adapt to
satisfy customers
Steps to follow during a problem-solving process:
1. Identify resource gap and obtain resources
2. Explain impact on business and consider solutions
3. Choose best solutions and explain IN BREADTH AND DEPTH
Pros and Cons chart:
Technique to help manager make decision based on pros and cons
e.g.
Introducing new subject at school
PROs CONs
- Wider choice range -No teacher with knowledge (cost of additional teacher)
- May attract more learners - Build new classroom
Decision Tree
Visual representation of different outcomes for an event (helps look at different options)
Will it distract Ignore till
Yes me longer than finished with
my break? studies
Getting an Is it a quick
SMS whilst Is it time for yes/no Respond to
studying a break? answer? SMS
Ignore till
No
next break
Value Chain Analysis:
Concept of adding value for customer should be the aim ---> satisfied customers for success
E.g. in Manufacturing environment: (easy to see how and when value is added)
- Process of raw material (input) being transformed into a valuable product (output)
E.g. in other instances: (more difficult to see)
- Knowledge and systems (input) to create services (intangible output) for customer
Important to look at entire business to decide where value is added in a cost-effective manner to
enhance quality of product/service
Micro Environment
- Includes 8 business functions:
1. Purchasing department
2. Production department
3. Financial function
4. Marketing department
5. Public Relations
6. General Management
7. Administrative Function
8. Human resources/ Human Capital function
Market Environment (external)
- Includes Porter’s six forces model:
- Power of competitors
- Threat of new entrants
- Substitute products
- Power of buyers
- Power of suppliers
- Impact of complementary products
Macro Environment (external)
- Includes PE2STLE:
- Political Factors
- Economic Factors
- Ethical Factors
- Social Factors
- Technological Factors
- Legal Factors
- Environment Factors
Importance of creative thinking/problem solving techniques to identify strategies to improve
overall performance of business:
- To solve problems, think as if there’s no box (creativity)
- (not good enough to bring old solutions to the table)
Creative Thinking: identifying problem consumer isn’t aware of (or is ---> through
complaining’/ taking business elsewhere) and finding ways to solve problem
Power of consumer: (Porter’s model)
Unhappy customer = no customers & deteriorated performance for business
, Aim of creative solutions:
- To create & maintain competitive advantage
- Product life cycles are becoming shorter and business must constantly adapt to
satisfy customers
Steps to follow during a problem-solving process:
1. Identify resource gap and obtain resources
2. Explain impact on business and consider solutions
3. Choose best solutions and explain IN BREADTH AND DEPTH
Pros and Cons chart:
Technique to help manager make decision based on pros and cons
e.g.
Introducing new subject at school
PROs CONs
- Wider choice range -No teacher with knowledge (cost of additional teacher)
- May attract more learners - Build new classroom
Decision Tree
Visual representation of different outcomes for an event (helps look at different options)
Will it distract Ignore till
Yes me longer than finished with
my break? studies
Getting an Is it a quick
SMS whilst Is it time for yes/no Respond to
studying a break? answer? SMS
Ignore till
No
next break
Value Chain Analysis:
Concept of adding value for customer should be the aim ---> satisfied customers for success
E.g. in Manufacturing environment: (easy to see how and when value is added)
- Process of raw material (input) being transformed into a valuable product (output)
E.g. in other instances: (more difficult to see)
- Knowledge and systems (input) to create services (intangible output) for customer
Important to look at entire business to decide where value is added in a cost-effective manner to
enhance quality of product/service
