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Business Theme 3 and 4 > 3.1 > Flashcards

3.1 Flashcards

1
Q

What is a mission statement

A

The overriding purpose of the business supports its vision for the future

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2
Q

Criticisms of mission statements

A

-Often too vague and general
-Not always supported by actions of the business

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3
Q

Define Corporate objectives

A

Specific performance goals derived from a firms overall aim, provide strategic focus, measure performance and inform decision making

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4
Q

Define Functional Objectives

A

Day to day goals of departments derived from corporate objectives. Must be carefully aligned across departments so everyone is working towards a shared goal.

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5
Q

Factors influencing business objectives

A

Size and age of the business, legislation, competition etc

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6
Q

What is Ansoff’s matrix?

A

Tool for business with a growth objective, used to identify an appropriate corporate strategy and identify risks.

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7
Q

What are the 4 areas of Ansoff’s matrix?

A

-Market penetration
-Product development
-Market development
-Diversification

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8
Q

Define Market penetration

A

Existing products into existing markets - least risky strategy

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9
Q

What is the aim of market penetration?

A

To increase market share by:
-getting existing customers to buy more
-widen range of existing products

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10
Q

Evaluating market penetration

A

-Businesses focus on markets and products it knows well
-Exploits insights on what customers want
-Unlikely to need market research

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11
Q

Define product development

A

A growth strategy where a business aims to introduce new products into existing markets

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12
Q

Evaluating product development.

A

-Plays on strengths of an established business
-Emphasis on effective market research and innovation
-Exploits existing customer bases

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13
Q

Define market development

A

A growth strategy where the business seeks to sell its existing products into new markets

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14
Q

Approaches to market development

A

-Entering new geographical markets
-Reposition product
-Seek complementary locations

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15
Q

Evaluating market development

A

-Logical strategy where existing markets are saturated or in decline
-Existing products may not suite new markets

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16
Q

Define Diversification

A

Where a business markets new products in new markets

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17
Q

Evaluate Diversification

A

-Risky strategy as no experience, few economies of scale

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18
Q

What are some approaches to diversification?

A

-Innovation and R&D
-Acquire a new business in the market

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19
Q

Define competitive advantage

A

An advantage over competitors gained by offering consumers greater value by means of lower prices or by providing greater benefits and services that justifies higher prices

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20
Q

What is a low-cost strategy?

A

Become the lowest-cost operator. Involving producing on large scale enabling the business to exploit economies of scale.

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21
Q

Features of low-cost operators

A

-high levels of productivity & efficiency
-High capacity utilisation
-Bargaining power

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22
Q

What is differentiation?

A

Aiming to offer a product that is distinctively different from competition, with the customer valuing the differentiation

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23
Q

What are some ways to achieve differentiation?

A

-Superior product quality
-Branding
-Wide distribution channels
-Sustained promotion

24
Q

What is swott analysis

A

It helps a business assess its competitive strengths and the nature of its external environment

25
Q

What does swot stand for?

A

-Strengths
-Weaknesses
-Oppotunities
-Threats

26
Q

How do you assess opportunities and threats?

A

-How to take advantage of opportunities
-How to protect against threats
-Role of risk management

27
Q

Advantages of SWOT analysis?

A

-Logical structure
-Focuses on strategic issues
-Encourages analysis f external environment

28
Q

Weaknesses of swot

A

-Lacks focus
-Becomes out of date quickly

29
Q

How can we asses strengths and weaknesses?

A

-Competitive advantages
-Key performance indicators

30
Q

What are strategic objectives?

A

Focused on long-term, higher risk & uncertainty, difficult to change, likely to involve significant investment

31
Q

What are tactical objectives?

A

Focused on short term, relatively low risk, realistic & achievable, Easy to change

32
Q

Key benefits of cost efficiency

A

-Lower unit costs
-Improved cash flow
-Higher return on investment

33
Q

Employee welfare objectives

A

-Staff retention
-Quality of customer service

34
Q

What are customer satisfaction objectives?

A

-Customer service
-Quality

35
Q

What are social objectives?

A

-Corporate social responsibility

36
Q

What is PESTLE analysis?

A

A framework for assessing the key features of the external environment facing a business

37
Q

What does PESTLE stand for?

A

Political, Economic, Social, Technological, Legal, Ethical/Environmental

38
Q

PESTLE: Example of political factors?

A

Competition policy, Industry regulation, Gov spending & tax policies.

39
Q

PESTLE: Economic factors

A

Interest rates, Consumer spending & income, Exchange rates, Business Cycle (GDP)

40
Q

PESTLE: Social factors

A

Demographic change, Impact of pressure groups, Consumer tastes & fashions, Changing lifestyles.

41
Q

PESTLE: Technological factors

A

Disruptive technologies, Adoption of mobile technology, New production process.

42
Q

PESTLE: Legal factors

A

Employment law, Minimum wage, Health & Safety laws, Environmental legislation

43
Q

PESTLE: Ethical/ Environmental factors

A

Sustainability, Tax practises, Ethical sourcing, Pollution & carbon emissions

44
Q

What are Porters 5 forces?

A

Power of suppliers, Threat of substitutes, Power of customers, Threat of new entrants, Intensity of rivalry

45
Q

SWOT: Examples of strengths

A

Trusted, reputable brand recognised by many

46
Q

SWOT: Examples of weaknesses

A

-Cash flow concerns
-Lower profits than competitors

47
Q

SWOT: Examples of opportunities

A

Expanding markets

48
Q

SWOT: Examples of Threats

A

-Declining market
-Increased competition

49
Q

What is a Cost Leadership approach?

A

An approach taken by business that compete on price, and seek to be cheapest retailer or producer within the market

50
Q

What is the differentiation focus approach?

A

An approach taken by businesses which compete in terms of benefits offered to customers from the purchase of its products or services

51
Q

Benefits of Porters 5 forces model

A

-Helps gain competitive advantage
-Shows potential market entrants & how profitable the market is & where best to position

52
Q

Define Star product

A

High growth rate and high level of market share
-Require ongoing investment if they want to be cash cows

53
Q

Define Cash cow product

A

-Low growth market with high market share
-Can be used to fund development of other products

54
Q

Define Question marks

A

-High growth low market share
-Requires significant investment
-Risk they may become dogs

55
Q

Describe Dog products

A

-Low growth market with low market share
-Divest/phase out products
-Use remaining profit to be reinvested in business

56
Q

Define Distinctive capability

A

When a businesses has a particular strength it is very difficult for competitors to copy

57
Q

Examples of distincitve capabilities

A

-Operational skills & expertise in the business
-Relationships & networks
-Reputation and image of the business

Business Theme 3 and 4 (10 decks)

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