This document contains summaries made from " Consumo business studies textbook" which summarizes the different strategies used to improve the overall performance in an organization such as the value chain analysis; corporate strategies; generic strategies etc.
➢ The importance of creative thinking and problem solving:
▪ Creative thinking is defined as “identifying problems consumers are not aware of and
solving it”.
▪ Aim of finding creative solutions is to create and maintain a competitive advantage.
➢ Possible steps of a problem-solving process:
1. Identify resource gap and obtain these resources.
2. Explain the impact on the business and consider different
solutions.
3. Choose the best solutions and explain it breadth and depth.
Strategies to improve the overall performance of the business:
➢ Pros and Cons chart =
→ Helps make a decision based on the advantages and disadvantages of a specific
option.
➢ Decision tree =
→ Visual representation of different outcomes to a single event.
➢ Value chain analysis =
→ The aim of adding value for the customers.
➢ SWOT analysis =
→ A useful tool used to look at the external and internal environments.
➢ The Delphi technique =
→ Used as a method to obtain the opinions of experts on a particular topic, without
having to see them face to face.
→ The reason for experts is consulted in a situation where they interact, but remain
anonymous, is to prevent a situation where subjectivity and personal opinions
prevent members of the group from expressing their opinions.
➢ Resource-based approach =
→ Where the business finds out which resources are of strategic importance to the
business.
, ➢ Balance score card (BSC) =
→ Developed by Kaplan and Norton.
→ Used to describe the key outcomes that the business would like to
“measure” in order to improve these outcomes.
→ The BSC forces management to focus on issues that are important
because they create value in and for the business.
→ The elements of the BSC that are used are finance, customer, internal
business perspective and learning and growth standpoint.
→ The financial perspective focuses on maximum utilisation of assets and
minimising costs in order to create stakeholder value.
→ The customer perspective focuses on how customers see the business and
what their expectations may be.
→ Internal business perspective is focused on innovative products or
services.
→ The learning and growth perspective look at how employees in the
business can continue to improve and create value.
- Strategic management can be defined as …
➢ Top management analyses events that take
place in the business environment.
➢ The decisions and actions that are taken in
response to the analysis, are used to form
strategies of the business.
• Generic strategies:
➢ Low-cost strategy =
→ Is having the lowest cost in the industry.
→ To achieved this the workforce has to be committed to saving costs, which
can be achieved by…
▪ The business having access to cheap raw materials.
▪ Costs be reduced through efficiency, using mass production,
technology and re-engineering activities.
➢ Focus [Niche market] =
→ all efforts are aimed at a specific market segment based on geography,
culture, age, hobbies or any other criteria that created a unique group of
customers in the market.
➢ Differentiation =
→ All efforts aimed at providing a unique product/ service which will ensure
customer loyalty.
→ The uniqueness may be based on factors such as:
▪ Quality.
▪ After-sales support.
▪ Product features.
▪ Distribution or marketing features.
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