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Business > 3.1 > Flashcards

3.1 Flashcards

1
Q

what is a mission statement

A

sets out the purpose and primary objectives of a business

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2
Q

what does SMART stand for

A

specific
measurable
achievable
relevant
timed

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3
Q

what are the limitations of mission statements

A

can be unrealistic and over optimistic
waste of management time and resources
lead to conflicts and inconsistencies when not properly written
can be ambiguous
can become obsolete as the business develops but the mission statement stays the same

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4
Q

what are porter’s 4 generic strategy models

A

cost leadership
cost focus
differentiation leadership
differentiation focus

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5
Q

what is differentiation leadership

A

involves making your products/services and business different from your competitors

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6
Q

what is cost leader

A

aim is to become the lowest cost producer in the industry, increasing profits by reducing costs to increase market share by charging lower prices while still making a profit

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7
Q

what is cost focus

A

when a business takes a lower cost advantage in one or more market segments

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8
Q

what is differentiation focus

A

a business seeks to differentiate its products in one or more target market segments

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9
Q

what are the 4 main components of ansoffs matrix

A

market penetration
market development
product development
diversification

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10
Q

what is diversification

A

when a business markets a new product in a new market

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11
Q

what is market development

A

uses an existing product trying to be sold in new markets

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12
Q

what is market penetration (eg)

A

increasing sales in an existing market (eg loyalty schemes)

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13
Q

what is product development

A

new product/service developed for an existing market

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14
Q

what are the advantages of ansoffs matrix

A

takes into account internal & external factors
builds on strengths
explores opportunities

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15
Q

what are the disadvantages of ansoffs matrix

A

depends on situation, objectives and resources

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16
Q

what are the 4 components of boston matrix

A

star
cash cow
dog
question mark/problem child

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17
Q

why should a business use the boston matrix

A

it can tell a business where to invest their budget and whether their products are worth continuing

18
Q

what is a question mark/problem child

A

products with low market share but high market growth they have often just been launch so are building customer loyalty so should be invested in as they could become a star

19
Q

what is a cash cow

A

products with high market share but low market growth, they have reached maturity but should still be continued until they become dogs

20
Q

what is a dog

A

products which have low market share and low market growth, these should be discontinued as they likely won’t be making a profit

21
Q

what is a star

A

products with high market share and high market growth, these will continue to grow and gain market share increasing sales as they develop

22
Q

what are the limitations of the boston matrix

A

there can be a middle ground making some products hard to categorise
the market is not clearly defined
high market share doesn’t equal high profits

23
Q

what are focus strategies (porter)

A

concentrate on particular niche markets and by understanding the dynamics of that market and the unique needs of the customers within it

24
Q

how do you calculate capacity utilization

A

current output/maximum output x 100

25
Q

what is architecture

A

a structure of relational contacts within or around the organization with customers, suppliers and with employees

26
Q

why can you not have a reputation without first having architecture

A

it is built on architecture

27
Q

what is a reputation

A

this includes customers own experience, quality signals, guarantee, word of mouth, warranty, association with other brands and staking the reputation once it’s established

28
Q

what is swot analysis

A

a method for analysis a business, its resources and its environment, commonly used as part of strategic planning

29
Q

what does SWOT stand for

A

strengths
weaknesses
opportunities
threats

30
Q

what are the advantages of swot analysis

A

identifying the strengths of the business
identifying threats
help the business prioritize issues that are key to success
look at opportunities that are available for the business

31
Q

what are the limitations of using swot

A

identifies threats doesn’t give solutions
may oversimplify problems
takes time & money to conduct

32
Q

what does the P stand for in pestle

A

political- tax policy, trade restrictions, tariffs, political stablilty

33
Q

what does the first E stand for in pestle

A

economic- economic growth, interest rates, exchange rates, inflation rates

34
Q

what does the S stand for in pestle

A

social- health consciousness, population growth rate, age distribution, career attitudes

35
Q

what does the T stand for in pestle

A

technology- R&D activity, automation, technology incentives, rate of innovation

36
Q

what does the L stand for in pestle

A

legal- employment laws, trading laws, marketing restrictions, up and coming laws

37
Q

what does the second E stand for in pestle

A

environment- environmental regulations, eco-customers, wastage, recycling laws

38
Q

what are porters 5 forces

A

competition, bargaining powers of customers, threat of new entrants to the market, threat of substitute products, bargaining powers of suppliers

39
Q

what influence does competition have on the market

A

price wars, investment in innovation + new products, intensive promotion, higher spending on advertising -> all of these increase costs & lower profits

40
Q

what influence does bargaining power of customers have on the market

A

pressure to drive down prices, increase quality -> reduce overall profits in an industry

41
Q

what influence does threat of new entrants to the market have on the market

A

if new businesses enter the market they will gain market share and rivalry will intensity, the position of existing firms is stronger if there are barriers to entering the market, barriers to entering determind the threat of new entrants

42
Q

what influence does threat of substitute products have on the market

A

this is a product that can be regarded as something that meets the same need, the extent of the threat depends upon; how well the price and performance match that of the industries product, the willingness of customers to switch -> customer loyalty -> switching costs

Business (22 decks)

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