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business > 3.1 > Flashcards

3.1 Flashcards

1
Q

What is a mission statement

A

An expression of a business’s overall aim as well as its core values and context
Informs the development of corporate and functional objectives
Often expressed in inspirational terms to provide direction and a common purpose for employees

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2
Q

What are SMART objectives

A

Specific
Measurable
Agreed
Realistic
Time-bound

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3
Q

What is Ansoff’s Matrix + what are the 4 strategies outlined by the matrix

A

Ansoff’s Matrix is a tool for businesses with a growth objective
It is used to identify an appropriate corporate strategy and identify the level of risk associated with the chosen strategy
Market penetration EM EP
Market development NM EP
Product development EM NP
Diversification NM NP

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4
Q

What is Porters generic strategy of Porter

A

Porter’s Generic Strategic Matrix identifies a range of strategies a business might adopt considering
Its source of competitive advantage (cost or differentiation)
The scope of the market in which it operates (mass or niche)

Porter argues that failing to adopt one of these strategies risks a business being ‘stuck in the middle and unable to compete successfully with rivals in the market

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5
Q

What are the axis on Porters strategic matrix (generic strategy)

A

Competitive advantage - Cost ,Differentiation
Market scope- mass, niche

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6
Q

What are the 4 strategies outlined by Porter

A

Cost leadership- Be the most competitive business in a large market
Differentiation- Be distinctive- Stand out on quality, innovation, brand identity or customer service
Cost focus- Be the most competitive business in a small or specialised market
DIfferentiation - Deliver unique products that meet specific needs within a small market

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7
Q

How might a business use the Boston matrix?

A

To conduct portfolio analysis
Portfolio analysis involves a business carrying out a detailed evaluation of its full range of products in order that appropriate strategies may be identified and pursued

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8
Q

What is a distinctive capability

A

When a business has a particular strength that is very difficult for competitors to copy, it has a distinctive capability
The nature of that distinctive capability will determine the aims and objectives of the business and the strategies it will pursue to achieve them

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9
Q

What are kays distinctive capabilities

A

Architecture – Relational contacts within or around the organisation with customers, suppliers and employees. This increases co-ordination within and around the business thus allowing the business to respond quickly to changes in the market.
Reputation – This includes the customers own experience and word of mouth created by businesses providing a good customer service as well as quality products. This creates loyal customers thus giving the business a competitive advantage over existing business and new entrants.
Innovation – This is when a business creates new goods and inventions. This is makes the business differentiated to its competition. However, it is only likely to last in the short term as similar products are released once other businesses see the invention.

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10
Q

What is SWOT analysis

A

SWOT Analysis is an analytical tool used by businesses to identify
Internal strengths and weaknesses
External opportunities and threats

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11
Q

Difference between strength and opportunity _ example of each

A

Strength - What the business is good at
Internal resources such as skilled staff or a particular innovation
Opportunities- Options a business may exploit to enjoy further success
Developing markets for specific products become apparent

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12
Q

Difference between weaknesses and threats with example of each

A

Weakness-What the business does poorly
Resource or capital limitations including labour and finance
THREATS -Hazards that have the potential to damage business performance
New or emerging competitors are gaining market share

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13
Q

What is PESTLE analysis

A

PESTLE analysis examines the external factors that are likely to impact the activities and outcomes of a business
PESTLE is an acronym for:
Political
Economic
Social
Technological
Legal
Environmental

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14
Q

How can PESTLE be used by businesses

A

Managers can use the information gathered to understand the potential threats to the businesses performance and identify future difficulties so that action can be taken to help avoid and eliminate their effects

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15
Q

5 reasons for changes in the structure of markets

A

Growth of the internet
Businesses leave and enter the markets or integrate with others
Changes in the regulatory framework
Changes in consumer tastes and preferences
Globalisation

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16
Q

What does Porters Five Forces identify

A

the key pressures on an industry that impact the ability of a business to compete with rivals

17
Q

What are Porters 5 forces

A

Industry Rivalry
Threat of new entry
Buyer power
Supplier power
Threat of substitution

18
Q

How does industry rivalry affect a businesses ability to compete with rivals

A

When there are many competitors selling similar products, the business will have little power
Many rivals are trying to get a more significant share of the market
Customers have a lot of choices and can shop around

19
Q

How does threat of new entry affect a businesses ability to compete with rivals

A

If new competitors can enter an industry quickly and without investing a lot of money, then the barriers to entry is low and the threat of new entrants is high
The market is likely to contain a large number of rival businesses
Individual businesses are likely to have little power

20
Q

How does buyer power affect a businesses ability to compete with rivals

A

When a business sells to a small number of customers those customers have significant power to negotiate lower prices
The business has few options when it comes to customers
It will have to price and sell products according to customer demands

21
Q

How does supplier power affect a businesses ability to compete with rivals

A

Where a business has a lot of choices over the suppliers from which it buys components
It is likely to be able to shop around for lower price

Where a supplier has significant power over a business as a result of offering a specialised component or where there is a small number of suppliers in the market
The business has little choice over the source of its suppliers
It is likely to have to pay high prices for its components and accept suppliers’ terms and conditions

22
Q

How does threat of substitution affect a businesses ability to compete with rivals

A

Where customers can easily swap a businesses products for those of a rival the business has little power
The business is likely to have to compete on price or invest heavily in developing a USP

business (19 decks)

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