2 Competitive constraints & Drivers, Power and Values
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The document discusses key competitive constraints and drivers that impact businesses. It identifies 12 main competitive constraints, including economic activity, government policy, competition, cost pressures, outsourcing, the labor supply, and environmental and ethical issues. It also discusses 4 main drivers that determine business behavior and performance: shareholders, customers, organizational culture, and external forces. Additionally, it examines how power and authority within an organization can determine its behavior and values.
2 Competitive constraints & Drivers, Power and Values
- 1. COMPETITIVE CONSTRAINTS Looks at the key competitive constraints on businesses
- 2. 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
- 3. COMPETITIVE CONSTRAINTS 3. COMPETITION – internal and external 4. PRESSURE ON UNIT COSTS – due to competition and innovation 5. OUTSOURCING – stocks, suppliers, technology, back office administration 6. LABOUR SUPPLY – competition, demographics, training 7. NEW PRODUCTS & SERVICES – “green” tourism, niche markets
- 4. 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
- 5. 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
- 6. 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
- 7. KEY DRIVERS What influences and determines how the business is run? What influences its objectives, how they are set and achieved?
- 8. 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
- 9. KEY DRIVERS 4. EXTERNAL FORCES e.g industry norms, pressure group lobbying, competition, economic, social, demographic and technological change, government policy, EU policy
- 10. THE RELEVANCE OF POWER & AUTHORITY THOSE IN THE ORGANISATION WHO HAVE THE P & A WILL USUALLY DETERMINE: ITS BEHAVIOUR ITS ETHICAL VALUES
- 11. POWER & AUTHORITY WHO HAS THE P & A? OWNERS SHAREHOLDERS FINANCIERS DIRECTORS SENIOR MANAGERS ACCOUNTANTS LAWYERS
- 12. POWER & AUTHORITY CUSTOMERS CONSUMER GROUPS EMPLOYEES THE MEDIA SUPPLIERS GOVERNMENT & EU LOCAL COMMUNITY
- 13. 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
- 14. VALUES SOME ETHICAL VALUES HONESTY RESPECT BEING RELIABLE BEING FAIR CARING FOR OTHERS DOING THE RIGHT THING
- 15. VALUES BUT THERE ARE ALSO NON ETHICAL VALUES ? MONEY FAME STATUS HAPPINESS PERSONAL FREEDOM
- 16. VALUES ETHICAL SHOULD PREDOMINATE? BUT USUALLY NON-ETHICAL COME FIRST! SHOULD THEY?
- 17. VALUES CAN 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
- 18. VALUES ISSUES & PROBLEMS - continued pressurising suppliers to cut input prices outsourcing downsizing intensive global based competition CONTRASTED WITH THE NEED FOR: honesty trust
- 19. VALUES CONTRASTED WITH THE NEED FOR: care and consideration giving respect being reliable being fair LATEST PRESSURE - “We need to be green”
- 20. VALUES THE 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
- 21. VALUES IT CAN BE DONE? Body Shop Cafedirect……………….
Editor's Notes
- #8: KEY DRIVERS OF BUSINESS BEHAVIOUR
- #15: PLUS: IMPORTANCE OF OUR CULTURE e.g. bribery SOME ETHICAL VALUES: HONESTY RESPECT BEING RELIABLE BEING FAIR CARING FOR OTHERS DOING THE RIGHT THING BUT THERE ARE ALSO NON- ETHICAL VALUES MONEY FAME STATUS HAPPINESS PERSONAL FREEDOM ETHICAL SHOULD PREDOMINATE BUT USUALLY NON-ETHICAL COME FIRST! SHOULD THEY?