Ratio Analysis

A few simple, easy to understand presentations on Ratio analysis. Useful for Business A level and the Mini MBA:

Interpreting Accounts - Liquidity Ratios from tutor2u

Interpreting Accounts: Profitability Ratios from tutor2u

Interpreting Accounts - Shareholder Ratios from tutor2u

Interpreting Accounts - Financial Efficiency Ratios from tutor2u

Theorists - This list will grow!

I will put together a list of the theorists you need to understand. Mostly, you will see these in multiple choice questions, but you could/should refer to them in case studies where relevant.

Carroll's Corporate Social responsibility Pyramid - click here

Greiner's Growth Model - Click here

Bowman's Clock Strategy - Click here 

Degrees that make you rich!?

Especiaklly for Dan...bet you love this stat!

Click here to access. BTW - I bring the average down!

Business Theorists - 4 examples

Below are links which will take you to a few of the business theorists that you need to know and understand how it affects business strategy. Essential reading, not just for the mock, but to develop your understanding of how business' formulate strategy.

Click here for Caroll's CSR Pyramid

Click here for Ansoff's Matrix



Click here for Bartlett & Ghoshal - international strategies




Click here for Handy's organisational culture

Porters 5 Forces - Adidas, Toyota Ikea

Adidas from subhash kalal

Porter's Five Forces & Porter's Value Chain Model from msmn671

IKEA Porter's Five Forces and Value Chain Analysis from National University of Malaysia

Porters 5 Forces - Worked example

What is Porter’s five Forces model?

This model helps marketers and business managers to look at the ‘balance of power’ in a market between different types of organisations, and to analyse the attractiveness and potential profitability of an industry sector.

It’s a strategic tool designed to give a global overview, rather than a detailed business analysis technique. It helps review the strengths of a market position, based on five key forces.

Porter’s Five Forces works best when looking at an entire market sector, rather than your own business and a few competitors.

How can I use Porters five Forces?

To apply Porter’s Five Forces, you need to work through these questions for each area:

• Force 1: Threat of New Entry?
• Force 2: Buyer Power?
• Force 3: Threat of Substitution?
• Force 4: Supplier Power?
• Force 5: Competitive Rivalry?

 Threat of New Entry

If a new businesses can be easily started up in your sector without substantial investment - then this is a threat. The Internet has made this a reality in many sectors, especially publishing! So ask yourself the questions:

• What’s the threat of new businesses starting in this sector?
• How easy is it to start up in this business?
• What are the rules and regulations?
• What finance would be needed to start-up?
• Are there barriers to entry which give you greater power?

Buyer Power

Where there are fewer buyers, they often control the market. Questions here include:

• How powerful are the buyers?
• How many are there?
• Can the buyers get costs down?
• Do they have the power to dictate terms?

Threat of Substitution

If there are available alternatives then the threat of substitution increases.

• How easy is it to find an alternative to this product or service?
• Can it be outsourced? Or automated?

Supplier Power

Markets where there are few suppliers means the suppliers retain the power

• Examine how many suppliers are in the market?
• Are there a few who control prices?
• Or many so prices are lower?
• Do your suppliers hold the power?
• How easy is it to switch, what’s the cost?

Competitive Rivalry

Markets where there are few competitors are attractive but can be short-lived. These are highly competitive markets with many companies chasing the same work reduce your power in the market.

• What’s the level of competition in this sector?
• What’s the competitor situation? Many competitors and you’re all in a commodity situation or a few?

Examples of how Porter's five Forces can be applied to a business?

If your business is thinking about moving into new sectors or markets, or if your business is stuck in a commodity situation, then Porter’s Five Forces enables you to see the issues clearly.

Work through each of the forces to identify in your current sector and your potential sectors, to see who has the power.

Here are some examples of where the balance of power lies in different markets

• 1. Threat of New Entrants

An example is web design, as there are independents in every location. This is an easy market to enter with few requirements, other than skills, initiative and relevant hardware and software. This does mean there are many new entrants!

• 2 . Buyer Power

An example is the grocery sector since supermarkets tend to retain power over suppliers due to volume and price of contracts. They dictate terms, set prices and can possibly end agreements at any time.

• 3. Threat of Substitution

The substitute to all services is DIY. For example hairdressing or writing a will. Focus is on expertise, customer service or added value.

• 4. Supplier power

Some sectors have monopolistic (one) or oligopolistic (few) suppliers, such as utility companies. Sometimes customers have little choice i.e. where to buy domestic water suppliers though this is changing.

In the jewellery sector, diamond suppliers often hold the power and can set prices, withhold supply and restrict sales.

• 5. Competitive rivalry

These include Estate agents, web design and office stationary. Many competitors often buy on price.

What to watch for?

Sometimes not all the information is available and you may need to make assumptions, which should be shared. For example it’s difficult getting specific market information on parts of the Middle East and China.

Porters 5 Forces

Porter's Five Forces Model - Analysing Competiton from tutor2u

CSR - More case studies on effectiveness

Click here to access a useful piece that looks at why firms are moving more towards CSR in their everyday activities.

Your aim today, is to look at a firm of your choice and discuss the CSR that they do, linking it the factors listed in the chart opposite.

Corporate Social Responsibility - An Introduction

Introduction to csr de Viren Patel

Business & Corporate Social Responsibility from tutor2u