VCE Key Principles in Business Management

Summary:

This text discusses various concepts related to change management in business, focusing on Foxtel as an example. It begins by defining change as adopting new ideas or behaviours responding to internal and external pressures, such as economic conditions, customer preferences, technology advancements, and competition. Foxtel’s experience with streaming competitors like Netflix and Stan is mentioned, leading them to launch services like Kayo and Binge to address changing customer content consumption habits and declining profits.

The text introduces two types of changes: incremental and transformational. Incremental changes are small and continuous, while transformational changes are significant and impact the entire business. Businesses can adopt a proactive or reactive approach to change. Proactive change involves planning ahead to take advantage of potential pressures, while reactive change is a response to pressures faced by the business.

Key performance indicators (KPIs) are criteria used to measure a business’s success in achieving objectives. Various KPIs, such as market share, net profit, productivity growth, sales, staff absenteeism, staff turnover, wastage, customer complaints, workplace accidents, etc., are mentioned to evaluate business performance.

Benchmarking is highlighted as a means to compare KPI results against industry standards. The force-field analysis is discussed as identifying and analyzing driving and restraining forces for a proposed change, helping managers make informed decisions and develop strategies to overcome resistance.

The text then explores Porter’s generic strategies for gaining a competitive advantage: lower cost and differentiation. Understanding the five competitive forces, such as supplier power, buyer power, competitive rivalry, the threat of substitution, and the threat of new entry, is emphasized when deciding on a strategy.

Finally, the text suggests a process for managers to decide on the most appropriate generic strategy for their business, considering their strengths and competitive forces.

Excerpt:

VCE Key Principles in Business Management

BUSINESS MANAGEMENT REVISION
UNIT 4 – OUTCOME 1

Transforming a business: Reviewing performance- the need for change

Concept of Change

Change management-
– Businesses change is when a business adopts a new idea or behaviour.
– Businesses change as a result of pressures from both the internal and external business environments.
– Some examples of these pressures include the economy, customers, employees, technology, and competitors.