1.3 business objectives

Question 1

what is a mission and vision statement?

Answer 1

objects that provide a business specific direction for the future

Question 2

what is a mission statement?

Answer 2

declaration of a company on why they exist, who they are, and what they do. the mission statement focuses on the present. organization’s core purpose

Question 3

what are the aims of mission and vision statements?

Answer 3

strategic direction to employees and managers, motivates employees and managers and provides a reference point for their own aims and values, attract outside stakeholders like costumers banks and investors

Question 4

mission statement ( what the company strives to achieve everyday):

Answer 4

tangible and concrete statement of what the business wants to do now. This is shared with all stakeholders and the achievement of this mission is usually for a shorter period of time.

Question 5

advantages of mission and vision statements:

Answer 5

motivates employees with positive aspects of the business, show costumers what the business is about, help align stakeholder interests with business interests

Question 6

vision statements (what the company strives to be someday):

Answer 6

inspiring statement which provides all stakeholders with information about the business’s purpose, values and what it wants to achieve in the future (long term).

Question 7

disadvantages of mission and vision statements

Answer 7

vague and don’t distinguish one business from each other, sometimes not followed in the business, sometimes don’t provide direction to internal stakeholders

Question 8

what are business objectives

Answer 8

goals and targets a business strives to achieve.
its a target that’s measurable and has a given timescale

Question 9

what are some common business objectives?

Answer 9

protecting shareholder value, survival, profitability, growth, ethical objectives, profit satisficing

Question 10

3 reasons why objectives important?

Answer 10

to measure and control, to motivate, and to direct

Question 11

goal setting (SMART)

Answer 11

Specific, Measurable, Attainable, Relevant, Time Bound

Question 12

what are some common business objectives??

Answer 12

growth, profitability, protecting share holder value, ethical objectives

Question 13

what is growth in common business objectives

Answer 13

measured by increase in sales revenue or market shares, essential for survival to adapt to always changing competitive business conditions, failure to growth = declining competitiveness and threatening the firm´s sustainability

Question 14

what is profitability in common business objectives?

Answer 14

profit maximization = main objective of most private sector businesses, provides an incentive for entrepreneurs to take risks in setting up and running a business

Question 15

what is protecting share holder value in common business objectives?

Answer 15

earning a profitable return for stakeholders in a sustainable way, challenge for the directors of a firm is to balance short term profits (in the form of dividends)

Question 16

what are ethical objectives in the common business objectives?

Answer 16

Morals are concerned with what is right or wrong from the point of view of society.
business ethics are actions of people and organizations that are considered to be morally correct,

Question 17

toward who should businesses act morally towards?

Answer 17

towards their various stakeholder groups like: employees, managers, costumers, shareholders, suppliers, financiers, local community (environmental), the government and even competitors

Question 18

examples of ethical objectives

Answer 18

improving overall wellbeing of workers, adopting green technologies, socially responsible advertising

Question 19

examples of unethical objectives

Answer 19

exploitation of employees , misleading marketing, fraudulent business

Question 20

advantages of ethical business practice?

Answer 20

Improved corporate image
Increased customer loyalty
Avoiding fines

Question 21

disadvantages of ethical business practice ?

Answer 21

Compliance costs - costs to implement are high!
Lower profits
Often have to charge higher prices
Stakeholder conflict

Question 22

what are strategic objectives?

Answer 22

plans of action to achieve the objectives of an organization.
They are medium to long term goals that are expressed specifically
Fulfillment of strategies will allow an organization to reach its objectives.

Question 23

what are tactical objectives:

Answer 23

Tactics are methods used to enact strategies of an organizations.
They are usually short-term and frequently generated in order to enact strategies.
Fulfillment of tactics will allow an organization to perform its strategies.

Question 24

what is a competitive advantage?

Answer 24

any factor that enables a business to be more appealing to costumers such as: unique selling point, being able to produce goods or services better, or cheaply than rivals

Question 25

what are the three generic strategies that any business can use to sustain a competitive advantage?

Answer 25

1. cost leadership. 2. differentiation. 3. focus

Question 26

what is a mass market?

Answer 26

known as a mainstream market, refers to a large group of consumers who have similar needs and wants

Question 27

what is a niche market?

Answer 27

refers to a smaller group of consumers who have specific and unique needs and wants.

Question 28

what is cost leadership generic strategy ?

Answer 28

strategy that aims to establish a competitive advantage by achieving the lowest operational costs in the market for a particular good or service. For this strategy to be successful you have to reduce production costs

Question 29

what is differentiation generic strategy?

Answer 29

firm makes its mass-market products distinct from those of its competitors by creating uniquely desirable products and services. focuses on quality of the product instead of cost. Successful differentiation enables a business to charge a premium price, which in turn raises the firm's profit margins.

Question 30

disadvantage of differentiation generic strategy?

Answer 30

expensive, such as the amount of money needed to successfully develop and promote a high-quality product that stands out from others available on the market.

Question 31

what is focus generic strategy?

Answer 31

by offering a specialized service in a niche market. A focus strategy has two variants - businesses gain a competitive advantage by either focusing on being a low cost producer (cost focus), such as discount stores, or by differentiation within a particular segment (differentiation focus)

Question 32

what is cost focus?

Answer 32

emphasizing cost-minimization within a focused market

Question 33

what is differentiation focus?

Answer 33

pursuing strategic differentiation within a focused market.

Question 34

what is Corporate social responsibility (CSR)

Answer 34

consideration of ethical and environmental practices related to business activity. Businesses consider the interests of society and all stakeholders by taking responsibility for the effects their decisions and activities have Businesses try to do more than just maximize profits, they should also try to do more positive good for society. All businesses have to follow the laws of the countries they are operating in, but CSR goes above and beyond the laws.

Question 35

examples of CSR policies

Answer 35

Be conscious of impacts to the environment Adhere to fair employment practices Contribute to communities via volunteer or charitable work. Provide accurate product labelling

Question 36

advantages of CSR

Answer 36

drives innovation as a business develops products and systems to be socially responsible. attracts consumers to buy products and increase sales strengthens a business's brand image attracts employees and investors

Question 37

disadvantages of CSR

Answer 37

Costly ($$$$)and time consuming. if businesses do not meet their ethical standards, it damages brand image. It can lead to a conflict with some stakeholders who might see profits reduced by ethical objectives

Question 38

To practice CSR many businesses set ethical objectives like these:

Answer 38

Pay workers fair wages above the legal limit Invest in the local community to improve the lives of citizens Reduce waste and pollution to help the environment Pay suppliers as quickly as possible Use suppliers that guarantee fair trade and equal employment

Question 39

what is SWOT

Answer 39

provides a framework for strategic analysis to allow managers to assess the current situation facing an organization. It is a situational tool.

Question 40

what does SWOT stand for?

Answer 40

SWOT stands for: strengths, weaknesses, opportunities, and threats.

Question 41

what does SWOT analysis consider

Answer 41

considers both internal factors (strengths and weaknesses) and the external business environment (opportunities and threats).

Question 42

what does strength (Internal) in SWOT mean?

Answer 42

what do you do well. things that the organization does well or better in comparison to its competitors, e.g. brand recognition, reputation, market share, cost leadership, profitability, quality,

Question 43

what does weakness (Internal) in SWOT mean?

Answer 43

where do you need to improve. things that the organization does not do so well in relation to its competitors, e.g. low productivity, high staff turnover, outdated technology

Question 44

what does Opportunity (External) in SWOT mean?

Answer 44

what are your goals. External factors that provide openings (prospects) for an organization to succeed, e.g. new technologies, favourable demographic trends,

Question 45

what does threat (External) in SWOT mean ?

Answer 45

what obstacles do you face. External factors that hold back the business, preventing it achieving its organizational goals, e.g. detrimental weather conditions / seasonality factors, changing habits and tastes,

Question 46

when might the use of SWOT be useful?

Answer 46

in the first stages of planning processes. allows managers to consider several threats, opportunities, strengths and weaknesses

Question 47

advantages of SWOT?

Answer 47

useful visual tool, broad range of applications in dealing with real-world problems, issues and decisions It helps managers to develop a better understanding of the organization’s position in the market. It enables the organization to reflect on its strengths (to be protected) and weaknesses (to be developed into strengths). It facilitates strategic thinking. SWOT analysis can help managers and decision makers to build on the strengths of the organization and focus on the opportunities or try to protect itself against the risks of weaknesses and threats.