3.1 Flashcards
What’s a mission statement
A mission statement is a qualitative statement of an organisations aims
What is the hierarchy of business objectives
Mission statement and general aims
Corporate objectives
Department objectives
What is the uses of a mission statement
Focus; helps to focus and involve all employees in the business
B. Profitability; helps to motivate employees to become more efficient which could have an impact on profitability
C. Identity; helps to create an identity in a competitive marketplace
What are the limitations of a mission statement
Can be unrealistic and over optimistic
B. Can be a waste of management time and resources
C. Can lead to conflicts and inconsistencies when not properly written
D. Can be ambiguous
E. Can become obsolete as the business develops but the mission statement remains the same (perhaps due to a merger or change of product, iPod to iPhone for example)
What is an owners perspective on a mission statement
Owners will want to maximise shareholder value of the business
What is a managers perspective of a mission statement
Manager will look for core aims and objectives of the business to lead their staff / teams with
What are employees perspective of a mission statement
Employees will look for motivational statements that make them feel proud to work for that company
What are pressure groups leg unions perspective of mission statements
Pressure groups will look for a clear environmental or ethical message in the mission statement
What are customers perspectives of a mission statement
Customers will look to see core business principals that are ethical
What’s corporate timescales
This refers to strategy and the expectations of when a return will be achieved
What’s short-termism
a business that focuses on short-term returns on investment e.g. a start-up business’s first year’s profits
What’s long-termism
ability of a business to invest in projects over a long term e.g. a cure for cancer
What’s evidence based decision making
based on valid and reliable data e.g. we should give Shivani the job because she has smashed her last 4 targets
What subjective decision making
based on personal feelings and opinions e.g. we should give Tom the job I like him
What is short- termism
Short-termism is choosing a course of action which is best in the short term, but may be critical in the long-term
short-term attitude by a business is a focus on short-term returns on investments
What is the limitations of short - termism
they should be looking to invest in research projects that will give the business the competitive advantage
• Short-termism makes businesses fail to innovate and stagnate (Kodak and Blockbuster)
What is long - termism
This is a whole business approach
Considers ethical behaviour of the business in decision making
• Research and development have long term goals
• Staff development is seen a long term objective of the business, to retain and develop staff
• Long-term technology investments secure data for the future
What does SWOT stand for
Strengths - internal
Weaknesses - internal
Opportunities - external
Threats - external
How can SWOT analysis be used
strategy of growth and attack to use the business’s strength to maximise opportunities in the market
can be used as a tool to compete and defend, using the strengths to minimise the market threats
improve and attack new markets or produce new products
identify when to change and retreat
What does corporate strategy mean
The overall scope and direction of a business and the way in which it’s various business operations work together to achieve particular goals
What is Ansoff matrix
A tool used by businesses for analysis includes 4 factors
Market penetration (low risk)
Product or service development (moderate risk)
Market development (moderate risk)
Diversification (high risk)
Existing product, new product
Existing market, new market
Uses of Ansoff matrix
identify all their current products or services and their markets,
then consider their future options for expansion using the matrix shown, considering opportunities, associated costs, benefits and risks
Ansoff’s matrix helps to identify potential new markets or marketing strategies for a business
Limitations of Ansoff Matrix
It only shows part of the picture
• It oversimplifies the market
• Large MNCs may need thousands of sub options and strategies
• Any organisation using Ansoff’s matrix as an analysis tool to help decide on a company strategy should also conduct a SWOT and a PESTLE analysis to get a better idea of the whole picture, to see the issues from more than one angle
What’s Porters Strategic matrix
Porter suggested that there were 3 generic business strategies that would get competitive advantage. These were:
• Cost leadership; making products at the lowest cost, may include outsourcing, lean management, standard no frills low cost products
• Differentiation; the product or service is unique and the USP adds value to the product
• Focus; the product or service will serve a very small specific niche, high costs are passed on to customers, no close substitutes (Divided into cost focus and differentiation focus)
Lower cost, differentiation
Broad target, narrow target
