COMPETITIVE CONSTRAINTS

Looks at the key competitive constraints on businesses

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

COMPETITIVE CONSTRAINTS

3. COMPETITION – internal and external4. PRESSURE ON UNIT COSTS – due to

competition and innovation5. OUTSOURCING – stocks, suppliers,

technology, back office administration6. LABOUR SUPPLY – competition,

demographics, training7. NEW PRODUCTS & SERVICES – “green”

tourism, niche markets

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

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

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

KEY DRIVERS What influences and determines

how the business is run? What influences its objectives, how

they are set and achieved?

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

KEY DRIVERS 4. EXTERNAL FORCES e.g industry

norms, pressure group lobbying, competition, economic, social, demographic and technological change, government policy, EU policy

THE RELEVANCE OF POWER & AUTHORITY

THOSE IN THE ORGANISATION WHO HAVE THE P & A WILL USUALLY DETERMINE:

ITS BEHAVIOUR ITS ETHICAL VALUES

POWER & AUTHORITY WHO HAS THE P & A? OWNERS SHAREHOLDERS FINANCIERS DIRECTORS SENIOR MANAGERS ACCOUNTANTS LAWYERS

POWER & AUTHORITY CUSTOMERS CONSUMER GROUPS EMPLOYEES THE MEDIA SUPPLIERS GOVERNMENT & EU LOCAL COMMUNITY

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

VALUES SOME ETHICAL VALUES HONESTY RESPECT BEING RELIABLE BEING FAIR CARING FOR OTHERS DOING THE RIGHT THING

VALUES BUT THERE ARE ALSO NON

ETHICAL VALUES ? MONEY FAME STATUS HAPPINESS PERSONAL FREEDOM

VALUES ETHICAL SHOULD PREDOMINATE? BUT USUALLY NON-ETHICAL COME

FIRST! SHOULD THEY?

VALUESCAN 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

VALUES ISSUES & PROBLEMS - continued pressurising suppliers to cut input prices outsourcing downsizing intensive global based competition CONTRASTED WITH THE NEED FOR: honesty trust

VALUES CONTRASTED WITH THE NEED FOR: care and consideration giving respect being reliable being fair LATEST PRESSURE - “We need to be

green”

VALUESTHE 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 Bringing local communities on board

VALUESIT CAN BE DONE?

Body ShopCafedirect……………….