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com/topics/efficiency

Chapter
Problem Solving & overall
Organisation Performance
 1. Creative Thinking + Problem Solving techniques

Use Creative Thinking/Problem Solving techniques to develop strategies

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1. Analysis Tools!!!
Internal-environment:
1. SWOT = S+W
2. Value-Chain = Processes
3. Resource-Based = Resources

External-environment:
1. SWOT = O+T
2. Porter’s = Market environment
3. PESTLE = Macro environment
1.1. SWOT:
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Woolworths Below are the Strengths in the SWOT Analysis of Woolworths:

Strengths 1. Woolworths is a pioneer and among the oldest companies to introduce the modern
retail trade model
2. Well known retail name in Australia with over 900+ stores
3. The company has more than 100,000+ employees
4. Woolworths has several brand loyalty schemes for its regular customers
5. Strong brand name and efficient operations
6. There are several private label brands by Woolworths which are popular among
customers

Woolworths Here are the weaknesses in the Woolworths SWOT Analysis:

Weaknesses 1. Woolworths has limited global presence compared to its competitors
2. Growing presence of online brands has restricted growht

Woolworths Following are the Opportunities in Woolworths SWOT Analysis:

Opportunities 1. Woolworths can promote the brand through advertising, promotions, sponsorship
etc.
2. Seek growth through strategic acquisitions and franchise models in emerging
economies
3. Opening up stores in newer geographies can boost business for Woolworths

Woolworths The threats in the SWOT Analysis of Woolworths are as mentioned:

Threats 1. Rising raw material costs from both food and non-food will impact profit margins
overall
2. Economic recession could hinder the overall growth strategy of opening more
stores
3. More competition from international players can affects Woolworths' business
1.2. Value Chain Analysis:
Refer to the Micro - Environment:
1. Concept of adding value to the customer + business needs.
2. Input - Transformation = Output
3. If something is not adding value = OUTSOURCE!!!

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1.3. Resource-Based Approach:
Refer to Micro - Environment
Unique Resource = Competitive advantage

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1.4. Porter’s:
Refer to Market - Environment
1.5. PESTLE:
Refer to Macro - Environment

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2. Identify and define!!!
2.1. Pros and Cons chart:
Advantages and Disadvantages

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2.2. Decision Tree:
1. Visual representation of different outcomes to a single event.
2. Consequences of each.

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2.3. The Delphi Technique:
1. Obtain the opinions of experts on a particular topic.
2. The consultants stay anonymous =
2.1. Prevent subjectivity and personal options
2.2. Members of the group express their opinions + make a fair
recommendation.
E.g. Panel (kids) to test a new product on the McDonald’s kids menu.

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2.4. Balanced Score Card:
1. Describes the key
outcomes - evaluates Business Example
= Improve!
2. Strategies = create +
maintain + improve
competitive
advantage.

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2.4. Balanced Score Card: (Continue)

KPI’s = Key
Performance
Indicators.
Tool to use:
How you
know you
achieved
success.

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2.4. Balanced Score Card: (Continue)
Business Example

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2.4.1. The nancial perspective
Create shareholder value = Focuses on:
1. Maximum utilisation of assets
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2.4.2. The customer perspective
Focuses on:
1. How customers see
the business
2. Needs/Wants

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article/why-customer-
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2.4.3. The internal business perspective
Focuses on:
1. Innovative products/services
2. Management operations
3. Social investment
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2.4.4. The learning & growth perspective
Focuses on:
1. How employees can continue to improve + create value = Tangible
assets
2. Information capital = intellectual property
3. Culture of lifelong learning:
•Leadership
•Accountability
•Culture
•Teamwork

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 2.5. Drive Technique:
D - De ne:
The problem
Outline a plan of action
R - Research:
Fact nding and developing key
insights
I - Imagine:
1. Possibilities - Brainstorm
V- Visualize:
1. Prototype - create and realise
design
E - Evaluate:
1. Implement and learn

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2.6. Drill Down Analysis:
E.g. Market Segmentation:
Instead of trying to reach an entire market, a brand uses target marketing to
put their energy into connection with a speci c de ned group within that
market.

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2.7. Fishbone Strategy:
What contributes to a problem?

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2.7. Fishbone Strategy: (Continue)

Business Example
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2.8. RIMS Strategy: (Rational Interaction for Moral Sensitivity)

1. Argues that the solution should be bene cial to society, instead of

the focus primarily being on how the business bene ts.
2. All participants discussing the problem= equals = fair opportunity
to state his/her case.

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 3. Business Strategies:
Internal and external = create + defend = competitive advantage.

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3.1. Generic Strategies:
3.1.1. Low cost strategy/The Economic Principle:
1. Access to cheap materials
2. Reduce costs:
2.1. Ef ciency
2.2. Mass production
2.3. Technology
2.4. Re-engineering activities

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3.1.2. Focus/Niche market:
1. Develop a sustainable competitive advantage.
2. Aimed at a speci c market segment: geography, culture, age, hobbies
Demographics , etc.
3. Unique group = different needs .
4. Focus strategy = Expert knowledge on the market segment.

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3.1.3. Differentiation:
1. Unique product/service = customer loyalty Differentiation
2. Factors: DOES NOT
2.1. Quality
mean a variety
2.2. After-sales support
2.3. Product features
of products
2.4. Distribution/ marketing efforts
2.5. Price
2.6. Packaging

Things other
businesses
don’t do:
Personalise
your order

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3.2. Corporate Strategies:
3.2.1. Corporate combination:
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1. Joint Venture: Agreement to market-organic-food-fresh

combine resources = improve 3.

functioning of both businesses. Amazon, the world’s most powerful
Engen + Wimpy online retailer, has taken a giant stride
into traditional retailing, spending
2. Merge: Voluntary fusion of
$13.7bn (£10.7bn) to take over organic
companies = form new legal food chain Whole Foods Market.
entity. (Supply - chain)
3. Takeover: The purchase of one
business by another.
The purchaser = the bidder.
The business = the target.

2. Volkskas, Allied,
Trust Bank, United
Banks

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 3.2.2. Decline/ Defensive/ Divesture/ Harvest
Strategy:
1. Retrenchment: Reduces
the size of business.
2. Divestiture: Business
selling off some operations
Advantages
under-utilised + hampers
nancial performance. E.g. of
The marketing department. outsourcing
3. Liquidation: All assets are a
sold to pay for debt and the department
business ceases to exist.

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3.2.3. Growth/ Intensive Strategy:
1. Market penetration:
The existing market and existing
product = Lower pricing, Intensive
distribution
2. Product development:
New product to an existing market.
3. Market development:
Existing product to a new market.
4. Diversi cation:
New market wit a new product.

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3.3. Integration Strategies:
3.3.1. Vertical integration is a competitive strategy by which a company takes
complete control over one or more stages in the production or distribution of a
product.

For example, a supermarket may acquire

control of farms to ensure supply of fresh
vegetables (backward integration) or may
buy vehicles to smoothen the distribution
of its products (forward integration).

3.3.2. Horizontal integration,

as we have seen, is a company’s
acquisition of a similar or a https://www.mbacrystalball.com/blog/strategy/vertical-horizontal-integration-strategy/

competitive business—it may

acquire, but it may also merge
with or takeover, another
company to strengthen itself
to grow in size or capacity, to
achieve economies of scale or
product uniqueness, to reduce
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increase markets, or to enter difference-between-horizontal-and-

vertical-integration.html

new markets.
 4. Business Functions = Improve
Overall Performance:
4.1. Revise mission/ objectives:

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4.2. Allocate resources differently:
1. Resource-base Analysis:
1.1. Employees
1.2. Money
1.3. Machines
1.4. Time
1.5. Raw materials
1.6. Skills
2. Divestiture:
If not adding value
= outsource or
terminate.

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4.3. Total Quality Management:(TQM)
Total Customer Satisfaction
1. Process everybody commits to
thing about how all actions
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1.1. Quality and all tasks

1.2. Overall customer
satisfaction.
2. Internal customers =
employees - word of
mouth, industrial actions
etc.
3. Quality control:
3.1. Inspections =
measuring, examining,
testing +
benchmarked.
3.2. Sampling =
Test certain number
of items
4.4. Benchmarking:

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4.5. Financial Ratios: Refer to Micro - Environment
3.5.1. Increase pro tability:
3.5.2. Current Capital Ratio: ROI (Return on Investment)

1. Increase pro t =
1.1. ROI
3.5.3. Acid test Ratio:

2. Liquidity =
2.1. Current capital ratio
2.2. Acid test ratio

3.5.4. Solvency: 3. Solvent =

3.1. Solvency
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4.6. Performance Appraisals:
1. Planning tool =
Performance targets
2. Evaluation tool =
Self evaluation
360: customers, suppliers,
peers, subordinates.
3. Feedback tool =
Solve problems
Promotional opportunities

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4.7. Continuous Skills Development:

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4.8. Teamwork:
1. Important to the success:
1.1. Generates new ideas
1.2. Mentor one another =
soundboard.
1.3. Collective team effort
1.4. Different types of
intelligence/skills.
1.5. Allow for division of
work.

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 Complete:
Chapter worksheet

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