Section Eight • Internal Analysis - Analysing Overall Performance

Question 1

What are examples of non financial data?

3 bullets

Answer 1

• Marketing
• HR
• Operations

Question 2

What are examples of non financial data from marketing?

2 bullets

Answer 2

• Calculations of market share, market growth and sales growth
• Portfolio analysis- the products a company has, what stage they’re at in their life cycle and their perceived and actual quality.

Question 3

What are examples of non financial data from HR?

2 bullets

Answer 3

• Calculations of labour productivity, labour turnover, labour retention, employee costs as a percentage of turnover and labour cost per unit.
• An assessment of staff skills and qualifications, as well as HR plans for training and recruitment - to see if these are matched to the needs of the business. Staff morale and methods of motivation may also be assessed.

Question 4

What are examples of operations data?

Answer 4

• Calculations of capacity and capacity utilisation, unit costs and fixed/variable costs.
• The age and condition of any machinery, the operations processes used, etc.

Question 5

What is benchmarking?

Answer 5

Looking at successful businesses and identifying what they do well, then trying to apply their strategies to your business.

Question 6

What are Core Competences?

Answer 6

Core competences are the capabilities of a business that are unique to that business and give it a competitive advantage over its rivals.
They are capabilities that rivals do not have.

Question 7

What counts as a core competence?

Answer 7

They can be any feature that makes a business different - a specific piece of technology that allows a firm to produce items in a different way, specialist staff training, an innovative production process, an understanding of their customer base, etc. They can also be a combination of different features, or the way they work together.

Question 8

Why are core competences fundamental to business success?

Answer 8

Core competences are fundamental to the success of the business and should allow the business to compete in different areas. For example, WeightWatchers® started off as meetings and support groups - this understanding of how support helped people lose weight allowed the business to expand into food products, recipe books, magazines and even electronic items.