2 Competitive constraints & Drivers, Power and Values
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Transcript of 2 Competitive constraints & Drivers, Power and Values
COMPETITIVE CONSTRAINTS
Looks at the key competitive constraints on businesses
COMPETITIVE CONSTRAINTS
The key constraints which impact on business planning and operation
These constraints will impact on sales, profit, unit costs, organisational behaviour and market share
1. ECONOMIC ACTIVITY – inflation, unemployment, economic growth, interest rates, consumer expenditure
2. GOVERNMENT AND EU POLICY – political and economic, legislation, directives
COMPETITIVE CONSTRAINTS
3. COMPETITION – internal and external4. PRESSURE ON UNIT COSTS – due to
competition and innovation5. OUTSOURCING – stocks, suppliers,
technology, back office administration6. LABOUR SUPPLY – competition,
demographics, training7. NEW PRODUCTS & SERVICES – “green”
tourism, niche markets
COMPETITIVE CONSTRAINTS
8. THE GREEN AGENDA – methods of production and operation, supplies and suppliers
9. ETHICAL TRADING – treatment of suppliers, staff, the environment (local, national, international), the local community
10. ACCESS TO FINANCE – problems of raising new capital particularly for SME’s
COMPETITIVE CONSTRAINTS
11. ACCESS TO TECHNOLOGY – production and delivery
12. DOWNSIZING – structure, staffing
All of the above pose particular problems for the SME – although may find it easier to respond than the larger biz
THE RELEVANCE OF KEY DRIVERS, POWER &
VALUES
Looks at the key drivers which determine biz behaviour and
performance, the importance of power and the role of values
KEY DRIVERS What influences and determines
how the business is run? What influences its objectives, how
they are set and achieved?
KEY DRIVERS 1. WHAT SHAREHOLDERS WANT e.g.
dividends, share price, power over decision makers
2. WHAT CUSTOMERS WANT e.g. low prices, high quality, excellent customer service
3. THE CULTURE OF THE ORGANISATION e.g. owner or founder, historical practice, impact of change
KEY DRIVERS 4. EXTERNAL FORCES e.g industry
norms, pressure group lobbying, competition, economic, social, demographic and technological change, government policy, EU policy
THE RELEVANCE OF POWER & AUTHORITY
THOSE IN THE ORGANISATION WHO HAVE THE P & A WILL USUALLY DETERMINE:
ITS BEHAVIOUR ITS ETHICAL VALUES
POWER & AUTHORITY WHO HAS THE P & A? OWNERS SHAREHOLDERS FINANCIERS DIRECTORS SENIOR MANAGERS ACCOUNTANTS LAWYERS
POWER & AUTHORITY CUSTOMERS CONSUMER GROUPS EMPLOYEES THE MEDIA SUPPLIERS GOVERNMENT & EU LOCAL COMMUNITY
THE RELEVANCE OF VALUES
WE ALL HAVE VALUES AS DO BUSINESSES
THEY ARE CONCERNED WITH WHY WE BEHAVE THE WAY WE DO
e.g. “I am doing it this way because that’s what I believe in”
WE LEARN ABOUT VALUES EARLY – Parents, Friends, Media, Peers, School
VALUES SOME ETHICAL VALUES HONESTY RESPECT BEING RELIABLE BEING FAIR CARING FOR OTHERS DOING THE RIGHT THING
VALUES BUT THERE ARE ALSO NON
ETHICAL VALUES ? MONEY FAME STATUS HAPPINESS PERSONAL FREEDOM
VALUES ETHICAL SHOULD PREDOMINATE? BUT USUALLY NON-ETHICAL COME
FIRST! SHOULD THEY?
VALUESCAN ETHICAL VALUES BE BUSINESS
VALUES? PROBLEM - Need to marry business
objectives with ethical values - Can this be done? - Is it practical in the biz world?
CONSIDER THE ISSUES & PROBLEMS THIS POSES -
pursuit of profit continuous pressure to cut unit costs
VALUES ISSUES & PROBLEMS - continued pressurising suppliers to cut input prices outsourcing downsizing intensive global based competition CONTRASTED WITH THE NEED FOR: honesty trust
VALUES CONTRASTED WITH THE NEED FOR: care and consideration giving respect being reliable being fair LATEST PRESSURE - “We need to be
green”
VALUESTHE GREEN AGENDA
KEY WAY OF: Being competitive - not necessarily price! Gaining customer awareness e.g. via the
media Increasing sales and financial margins Enhancing customer loyalty Attracting funding e.g. government and EU Bringing local communities on board
VALUESIT CAN BE DONE?
Body ShopCafedirect……………….