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Business Studies A Level > 1. Business Objectives and Strategy > Flashcards

1. Business Objectives and Strategy Flashcards

1
Q

State what is meant by a stakeholder

A

A person or party with an interest in the success of a business. They will benefit from this success

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2
Q

Stakeholders can be classified as either i______ or e______

A

Internal

External

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3
Q

Examples of internal stakeholders include…

A

Owners
Employees
Managers

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4
Q

Examples of external stakeholders include…

A

Suppliers
Customers
Local community
Lenders

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5
Q

How may a business’ OWNERS affect the objectives set?

A
  • Depends upon sole trader/partnership/Ltd
  • Owners want best return possible on money they invest
  • Likely to want to see growth so their returns increase

?? (CAPTURE MARKET AND CUSTOMER LOYALTY VIA LOW PRICES > IMMEDIATE MAX PRICES) ??

EVAL: In the immediate future this tactic may reduce profits

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6
Q

How may a business’ EMPLOYEES affect the objectives set?

A
  • Want a high a wage as possible
  • Job security
  • More than legal holiday entitlement, sick pay, etc
  • Job satisfaction: interesting and challenging, training - improve their skills and thus their pay and promotion prospects
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7
Q

How may a business’ CUSTOMERS affect the objectives set?

A
  • Want the BEST QUALITY but the LOWEST PRICE
  • Product innovation (better products than last year)
  • Good customer service (e.g. call centre)
  • Expensive product? - credit facilities?
  • Aware of ethical issues
  • Customer dissatisfaction = loss of sales
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8
Q

How may a business’ SUPPLIERS affect the objectives set?

A
  • Want to see the business it supplies prosper = repeat, and larger orders
  • Want to be paid as promptly as possible
  • Build a long-term, loyal relationship: use regularly, involve in expansion plans
  • Change suppliers constantly/ delay payments? = supplier will not help out in future
  • Balance between NOW and beneficial FUTURE relationship
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9
Q

How may a business’ LENDERS affect the objectives set?

A
  • Banks want to be paid the agreed amount at the agreed time
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10
Q

How may a business’ LOCAL COMMUNITY affect the objectives set?

A

EXTERNAL BENEFITS:

  • Bring jobs
  • Community projects
  • Improved roads
  • Reduced crime

EXTERNAL COSTS:
- Additional congestion and pollution (e.g. noise)
-

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11
Q

Why does the GOVERNMENT have an interest in the success of all businesses?

A
  • Lower unemployment
  • Less benefits to be paid
  • Greater tax revenue
  • Business may start to export as it grows, improving the UK’s trading position
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12
Q

Identify the indirect stakeholder to all businesses that has an interest in their success

A

The government

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13
Q

What is meant by PRIVATE COSTS AND BENEFITS?

A

The costs that a business pays (e.g. labour costs) and the benefits it gets from it activities (e.g. profit)

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14
Q

What is meant by SOCIAL COSTS AND BENEFITS?

A

The overall, or “true cost” of a business’ activities, taking into account external costs and benefits as well as private ones.

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15
Q

Outline the hierarchy of objectives

A

Mission Statement
Aims/goals
Strategic objectives
Tactical objectives

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16
Q

What is a business’ mission statement’s purpose?

A

A mission statement gives a general idea of what the business exists to do and its purpose is to set this down for the benefit of all stakeholders.

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17
Q

What is a business aim/goal?

A

Aims/goals are more specific than a mission statement. They could be to survive, break even, increase market share or to increase profits.

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18
Q

What are business objectives?

A

The objectives are measurable targets of how to achieve business aims.

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19
Q

What are strategic objectives?

A

How a business plans to achieve its aims or goals, often a long-term approach

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20
Q

What are tactical objectives?

A

Short-term objectives necessary to achieve the business’ strategic objectives.

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21
Q

Which type of objective would concern the day-to-day activities of the business?

A

Tactical objectives

22
Q

What mnemonic can be used when setting objectives?

A

SMART

23
Q

What does SMART stand for?

A 
Specific (all understand)
Measurable (can identify success)
Agreed (between departments)
Realistic (avoid demotivation)
Time-bound (focus)
24
Q

Identify examples of internal constraints on the achievement of objectives

A
  • A lack of finance
  • Poor communication
  • A conflict of interests between departments
  • An industrial dispute with the workforce
25
Q

Identify examples of external constraints on the achievement of objectives

A
  • Changes in the law
  • State of the economy
  • Competition
  • Opinions and behaviour of external stakeholders
26
Q

Focusing on 1 stakeholder group when setting objectives is…

A

counterproductive as it will alienate the others

27
Q

The stakeholder approach means that in the future…

A

all stakeholders will benefit

28
Q

What are corporate objectives in business?

A

key areas where the business wants to achieve results rather than focusing on a single objective.

29
Q

It is important that corporate objectives cover a range of…

A

key areas where the business wants to achieve results rather than focusing on a single objective.

30
Q

Corporate objectives provide…

A

the focus for setting more detailed objectives for the main functional activities of the business.

31
Q

Give examples of ways in which a business may satisfy its social objectives

A

Being green
Offering sponsorship in the local community
Waste reduction

32
Q

Business today are now likely to have an awareness of cultural issues regardless of their…

A

size

33
Q

Which type of objective would CSR objectives be likely to clash with?

A

Profit objectives

34
Q

What is a contingency plan?

A

A plan of action that prepares for both (un)predictable and quantifiable problems.

35
Q

What are the 4 stages to a contingency plan?

A
  1. Identify what and how things could go wrong
  2. Understand the effects
  3. Devise plans to cope
  4. Implement strategy
36
Q

Miscommunication from employer to employee can quickly escalate to a lack of

A

trust

37
Q

3 tools to use when strategically planning?

A

Decision trees
Critical path analysis
Investment appraisal

38
Q

What is business strategy?

A

The action place that the business puts in place to reach its objectives.

39
Q

What is a tactic?

A

A particular step that a business takes to achieve its strategy.

40
Q

A business can use internal and external ____, on a regular basis to formulate a strategic plan

A

audits

41
Q

Internal audits look at the _____ and ________ of the business

A

strengths

weaknesses

42
Q

External audits look at the _____ and ________ of the business

A

opportunities

threats

43
Q

Many businesses employ ______ organisations to complete internal audits, although it is possible for management to do them for their own __________

A

external

departments

44
Q

What is meant by benchmarking?

A

Comparing to the best competitor

45
Q

What is the main acronym for completing an external audit?

A

PEST

46
Q

What does PEST stand for?

A 
Political 
Economic
Social 
Technological
factors
47
Q

Outline POLITICAL factors to consider when completing PEST

A

Legislation on…

Employment, health and safety, competition, and taxation.

48
Q

Outline ECONOMICAL factors to consider when completing PEST

A

Inflation, interest rate, currency value, unemployment and the economic cycle

49
Q

Outline SOCIAL factors to consider when completing PEST

A

Characteristics of the human population…

Spending habits, distribution, age

50
Q

Outline TECHNOLOGICAL factors to consider when completing PEST

A

Introduction and training may be required.

Recognition of old tech is needed.

Business Studies A Level (17 decks)

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