KK1+2
Provide 5 examples of contemporary business change
Scan and Go Trolleys
Darrell Lea closure of stores
Netflix $7 Ad subscription
Aldi camera / self serve checkout
Mcdonalds Plastic Straw removal
Define Number of Website Hits with an example (2 Marks)
The number of potential customers who visit its sites or engage with the site. For example, 100 people could have visited the Mount Ridley College website in 2023
Define the force field analysis theory (1 Mark)
A force field analysis outlines the processes of determining which forces drive and which forces resist a proposed change
Identify the acronym for restraining forces and list all forces
MOTEL- F
managers
organisation intertia
time
employees
legislation
financial considerations
Define Differentiation and explain why Woolworths change is Differentiation (2 Marks)
A strategy where a business seeks to be unique in its industry that is valued by consumers.
Woolworths scan and go trolleys is an example of differentiation as it is an innovative idea that has not been done before in the supermarket industry.
Define Proactive and Reactive Approaches to change. Explain whether Woolworths have been Proactive or Reactive in their change. (3 Marks)
Proactive is foreseeing changes in the dynamic environment and taking advantage of it. Reactive is letting the business environment impact the business before changes are made.
Woolworths have been proactive as no other supermarket had implemented Scan and Go trolleys, they noticed customers want fast service and took advantage of that.
List all 10 KPI's
Percentage of Market Share
Net Profit Figures
Rate of Productivity Growth
Number of Sales
Rate of Staff Absenteeism
Level of Staff Turnover
Level of Wastage
Number of Customer Complaints
Number of Website Hits
Number of Workplace Accidents
Explain 2 advantages of the force field analysis theory
Helps determine if the change is worth pursuing
Allows managers to develop ways of reducing restraining forces
Identify the acronym for driving forces and list all forces
melt crips go
managers, employees, legislation, technology
competitors, reduction of costs, innovation, persuit of profit, societal attitudes
globalisation, owners
Explain Porters Generic strategy. Define both strategies. (3 Marks)
Porter found that in response to competition, a business may wish to gain competitive advantage.
Lower cost is a strategy where a business aims to become the low cost producer in its industry.
Differentiation is a strategy where a business seeks to be unique in its industry that is valued by consumers.
Define Business change and Explain the two types of Change (2 Marks)
Business change is the adoption of a new idea or behavior.
Change can be transformational (Significant changes that impact whole business) or Incremental (Small Continuous change that occurs regularly in the business)
Explain how a rising number of customer complaints could result in a decrease in net profit figures (3 Marks)
Number of customer complaints is the amount of people that are dissatisfied with the business and/ or its products and have notified the business of their dissatisfaction. Net profit figures is the amount of money left over after expenses have been deducted from revenue earned.
If customer complaints are increasing, it shows a dissatisfaction with a businesses products. This means that customers will likely not return to the business and stop purchasing, which decreases sales and net profit figures.
Explain each step of the force field analysis theory (4 marks)
Define change
1. Weigh driving and restraining forces (assign score)
2. Rank forces based on how powerful they are
3. Implement a response to reduce restraining forces and strengthen driving
4. Evaluate whether the change should be implemented based on this analysis.
Explain how employees can act as both a driving and restraining force for businesses (3 Marks)
Employees are those that work for the business. They can act as a driving force as they can come up with innovative ideas that businesses can implement. However, they can resist change as change may have a negative impact on employees such as loss of employment, which can cause feelings of fear and anxiety.
Explain 2 disadvantages of the lower cost strategy (2 Marks)
Sales may fall as customers may perceive a product as poor quality
A business may lose market share if other businesses copy the low cost approach
Distinguish between Proactive and Reactive Change (3 Marks)
Proactive is foreseeing changes in the dynamic environment and taking advantage of it while reactive is letting the business environment impact businesses before the changes are made.
Proactive involves planning ahead and looking at long term goals while reactive is usually completed under pressure when changes are made.
Proactive may involve conducting market research to make more informed decisions while reactive could be dealing with a crisis such as COVID-19 and overcoming it.
A business is looking to implement TQM. Justify 2 KPI's they should use to measure the success of this change (4 Marks)
Number of customer complaints are the amount of people that are dissatisfied with the business and/or its products and have notified the business of their dissatisfaction. Implementing TQM may result in customers being more satisfied due to higher quality outputs, which can decrease number of customer complaints.
Evaluate the use of Lewins force field analysis theory
A Force Field analysis outlines the processes of determining which forces drive and which forces resist a proposed change
Advantages - Helps determine if change is worth it and helps develop strategies to reduce restraining forces
Disadvantages- May lead to division between groups who support / dont support, doesnt account for unexpected events.
Overall- Its good because as it allows managers to identify and analysis forces for and against change
Explain two driving forces for Woolworths (4 Marks)
Managers are those that make decisions about future directions of businesses. Managers can drive implementing scan and go trolleys by leading employees to support the change.
Competitors are businesses in the same industry. Competitors drove Woolworths to implement scan and go trolleys in order to gain a competitive advantage and take away marketshare from businesses like coles.
Discuss the differentiation approach (4 Marks)
Business can make revenue gain by charging a premium price
Develops customer loyalty which increases MS
Rival businesses can copy the approach
Initial costs
Compare proactive and reactive approaches to change (4 Marks)
Proactive is foreseeing changes in the dynamic environment and taking advantage of it while reactive is letting the business environment impact the business before changes are made. Proactive may include market research and long term planning while reactive may involve crisis management to issues such as COVID-19.
Both involve responding to pressures to the business environment. Both look at implementing changes based on KPI data.
Justify the use of 2 KPI's Woolies could use when looking at implementing scan and go trolleys (4 Marks)
Percentage of MS is a businesses share of the total sales in an industry for a particular good or service expressed as a percentage. Scan and Go trolleys may result in an increase in customers shopping at woolworths compared to coles due to fast service, which increases MS. N
Number of customer complaints is the amount of people that are dissatisfied with the business and/or its products and have notified the business of their dissatisfaction. IF customers are enjoying scan and go trolleys due to the convenience and speed, their number of customer complaints may decrease.
Apply the principles of the force field analysis theory to a Contemporary Business.
Woolies change is scan and go trolleys.
1. Woolies will weigh their driving forces (managers, technology) and restraining forces (employees, financial considerations) from 1-5
2. Rank these forces, most powerful may be managers driving as a 5 and employees a 4.
3. Implement a response to minimise restraining force. May include training employees so they arent stressed about how to work the new technology
4. Evaluate whether this action plan has been effective. Staff may be more confident which brings the restraining force down to a 2, showcasing the change would be successful.
Explain 3 restraining forces a contemporary business may face when implementing change (6 Marks)
Managers refer to those responsible for different areas of the business and ensuring objectives are achieved. Managers may not have the ability to lead Woolworths through implementing scan and go trolleys, which may result in unsuccessful change.
Employees are those who work for the business. They may feel job insecurity when implementing scan and go trollies, which could result in them fearing the change.
Financial considerations refer to immediate and long term costs of a proposed change. There are significant financial considerations that Woolworths may face when implementing scan and go trolleys and they may not be able to keep up with the maintenance costs
Analyse the use of both of Porters Generic Strategies for a contemporary business (5 Marks)
Woolies can save money on costs by reducing wages, increasing profit
Employees can be dissatisfied if their wages decrease, increasing staff turnover
Differentiation:
Develops customer loyalty as customers are satisfied with speed, increasing MS of woolies
Rival businesses can implement scan and go trolleys, lowering MS