business theorys

• kaplan and norton key features

  • top down approach
  • starts with the mission and the vision of the business
• kaplan and norton 4 parts

  • financial
  • customer
  • internal processes
  • organisational capacity
• kaplan and norton financial

  1. focus on financial performance
  2. example roi, operating profit margin
• kaplan and norton customer

  • focus customer satisfaction
  • example level of returns, service rating
• kaplan and norton internal processes

  • focus business efficiency
  • examples new

  product lead time, unit costs
• kaplan and norton organisational capacity

  • focus knowledge and innovation
  • examples: employee retention, flow of NPD ideas
• kaplan and norton balance score card advantages

  • broader view on how the business is performing
  • links performance measurement to long term
  • involves everyone in the business
  • highly flexible
• kaplan and norton balance score card drawbacks

  • danger of too many kpis
  • need to have a balance between four perspectives- not easy
  • senior management may still be too concerned with financial performance
  • needs to be updated regularly to be useful
• kaplan and norton balance scorecard diagram
• bartlett and Ghosal diagram
• bartlett and Ghosal two pressures ( axis)

  • force for local responsiveness
  • force for global integration
• bartlett and Ghosal force for local responsiveness

  • do customers in each country expect the product to be adapted to meet local requirements
  • do local ( domestic competitors) have an advantage based on their ability to be more responsive
• bartlett and Ghosal force for global integration

  • how important is standardisation of the product in order to operate efficiently( e.g economies of scale )
  • is consistent global branding required in order to achieve international success
• bartlett and Ghosal 4 parts

  • global (lplc and hpgi)
  • transnational(hplr and hpgi)
  • international(lplr and lpgi)
  • multidomestic(hplr and lpgi)
• bartlett and Ghosal global strategy

  • highly centralised
  • focus on efficiency( economies of scale )
  • little sharing of expertise locally
  • standardised products
  • e.g phizer
• bartlett and Ghosal transnational

  • complex to achieve
  • Aim is to maximise local responsiveness by also gain benefits from global integration
  • wide sharing of expertise (technology,staff)
• bartlett and Ghosal international

  • aims to achieve efficiency by focusing on domestic activities
  • international companies are largely managed centrally
  • e.g mcdonalds
• bartlett and Ghosal multi-domestic

  • aims to maximise benefits of meeting local market needs through extensive customisation
  • decision making is decentralised
  • separate business strategies for each country
  • e.g nestle
• Bowmans strategic clock diagram
• Bowmans strategic clock axis

  • x axis price
  • y axis perceived value to the customer
• Bowmans strategic clock low price and low value added 1

  • not a very competitive position for the business. The product is not differentiated and the customer perceives very little value despite a low price
• Bowmans strategic clock low price 2

  • business positioning themselves to be low cost leaders
  • aim to sell low price with high demand achieving economies of scale
• Bowmans strategic clock hybrid 3

  • involves some element of being low price relative to competition but also has some product differentiation
• Bowmans strategic clock differentiation 4

  • aims to offer customers the highest level of perceived added value usually adopted by luxury brands
• Bowmans strategic clock focus differentiation 5

  • highest price levels where customers buy the product because of high perceived value
  • a strategy adopted by luxury brands
• Bowmans strategic clock risky high margins 6

  • A high risk strategy that is likely to fail eventually
  • set high prices without offering anything extra in terms of perceived value
• Bowmans strategic clock monopoly 7

  • where there is a monopoly in the market only one business offering the product
• Bowmans strategic clock loss of market share 8

  • setting a middle range or standard price for a product with low perceived value
• Differentiation focuses on creating unique products or services that stand out from those offered by competitors.
• elkingtons triple bottom line diagram
• elkingtons triple bottom line

  • profit
  • people
  • planet
• elkingtons triple bottom line profit

  • familiar to managers identified from income statement
• elkingtons triple bottom line planet

  • measures impact of business on environment
• elkingtons triple bottom line people

  • measures extent to which the business is socially responsible
• elkingtons triple bottom line benefits

  • encourages business to think more than profit
  • encourages csr reporting
  • supports measurements of environmental impact and sustainability
• elkingtons triple bottom line drawbacks

  • not very useful at measuring overall business performance
  • hard to reliably and consistently measure people and planet bottom lines
  • no legal requirement to report it
• Carrols csr pyramid diagram
• Carrols csr pyramid 4 elements

  • economic: responsibility of a business to be profitable
  • legal: responsibility to obey laws and regulations
  • ethical: responsibility to act morally and ethically
  • philanthropic: responsibility to give back to society
• Carrols csr pyramid strengths

  • easy to understand
  • simply message
  • emphasises importance of profit
• Carrols csr pyramid weaknesses

  • should ethics be at the top
  • businesses don't always do what they claim to do when it comes to csr