207 Strategy and implementation Flashcards
What is strategy?
A medium to long term plan.
What is corporate strategy?
A medium to long-term plan that affects the entire business, decided upon by senior management. It involves decisions on how to achieve a business’s mission, vision, aims, and objectives.
What is divisional strategy?
Plans that relate to divisions in a business, guided by the corporate strategy.
What is functional strategy?
Plans that relate to a single functional operation such as production, marketing, or HRM, guided by the corporate strategy.
What are tactics?
Short to medium term decisions that aim to implement strategic decisions, usually carried out by middle management.
What is SWOT analysis?
A tool to identify and analyze the internal strengths and weaknesses of an organization, as well as the external opportunities and threats.
What is Porter’s 5 forces?
A model suggesting there are 5 main forces that determine business behavior and profitability: buyer power, supplier power, threat of substitution, threat of new entry, and competitive rivalry.
What is Ansoff’s matrix?
A strategic tool used by businesses to achieve growth, considering whether to target existing or new customers and existing or new products. It shows how a business can grow and how risky the method is.
What are the 4 strategies in Ansoff’s matrix?
Market penetration - same product and same market (low risk)
Product development - new product, same market (medium risk)
Market development - same product new market (medium risk)
Diversification - new product and new market (high risk)
What is horizontal integration?
When a business merges with or takes over another in the same industry at the same stage of production.
e.g. JD Sports takes over Footasylum
What is vertical integration?
When a business merges with or takes over a business at either the previous or next stage in the production process.
e.g. A super market takes over a bread manufacturer (backwards vertical)
What is organic growth?
A business will use its existing resources to grow [1] without involving
any other businesses. [1]
Often done through selling more of its products, opening more stores/fac
What is external growth?
Growth that comes from buying new businesses, e.g., through mergers or takeovers.
What is a merger?
An agreement between two or more equals to combine, while a takeover involves a larger company taking over a smaller company.
What is a franchise?
A franchise is the legal right to use the brand name, products and business style of an existing business.
The franchisor is the business who sells their brand name to others, and
What is rationalisation?
The reorganisation of a business to increase efficiency, often leading to a reduction in size or a change of policy.
What is outsourcing?
Outsourcing occurs when outside suppliers are involved in activities (1) that could be undertaken internally by a business. (1)
These suppliers are not directly employed by the business. (1)
Often specialist companies. (1)
