3.1 Flashcards
Mission statement definition
A brief statement written by a business describing its purpose and objectives , designed to cover its current performance
Reasons for a mission statement
gives the business a purpose and direction by reflecting their goals and values
make commitment to customers
bring workforce together
Aim definition
The large longer term goal of a business
Objective definition
Smaller shorter term goals which work towards the business’ aim
What does SMART stand for
Specific
Measurable
Agreed
Realistic
Time bound
Corporate objectives definition
Objectives set for the whole business to achieve
Departmental and functional objectives
The objectives of a department within a business
What are corporate strategies
Strategies used to achieve corporate objectives
Examples of corporate strategies
Ansoff’s matrix
Porter’s Strategic matrix
What does the Ansoff matrix consist of
Market penetration strategy - existing product , existing market
Product development strategy - new product , existing market
Market development strategy - existing product , new market
Diversification strategy - new product , new market
What does Ansoff matrix allow a business to consider
Level of investment in enw and existing products
Exploitation of different markets
Growth strategies for the business
Level of risk the business is willing to accept
What does Porter’s strategic model consist of
Cost leadership - focus on having the lowest cost in the market - total market
Cost focus - aim to have lower cost but not going for the lowest cost in the market - total market
Differentiation - aim to have the most unique product possible - niche market
Differentiation focus - aim to make the product stand from competitors but not be completely different - niche market
What does Porter’s strategic model allow
Gives a business an opportunity to adopt a srategies in order to gain a competitive advantage
What does the Boston matrix consist of
Star - high market share , high market growth
Question mark / problem child - low market share , high market growth
Cash cow - high market share , low market growth
Dog - low market share , low market growth
What does the Boston matrix allow
For businesses to analysis the products in their portfolio to see how much revenue and profit they are likely to be generating and to help making decisions about which product should be invested in
Cons of the boston martrix
Business can be medium as well as low or high as in share and growth
Market not clearly defined
High market share does not always lead to high profits
Doesn’t look at other indicators of profitability
Too simple
Competitive advantage definition
A set of unique features of a company and it’s products that are perceived by customers as significant and superior to the competition
Way competitive advantage can be achieved
Better quality or design
Creative advertising
Good customer service
Economies of scale
Flexibile delivery times
Ethical stance
Reputation
Distinctive capabillity definition
A form of competetive advantage that is difficult for competitors to understand or imitate
How can distinctive capabillity be achieved
Architecture - relationships in and around the organisation
Reputation
Innovation
What does SWOT stand for
Strengths
Weaknesses
Opportunities
Threats
Which of SWOT are internal audit
S and W
Which of SWOT are external audit
O and T
What is an internal audit
An analysis of the business itself and how it operates
What is an external audit
An analysis of the external environment
What does PESTLE stand for
Political
Economic
Social
Technological
Legal
Environmental
