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Theme 3 Business > 3.1 > Flashcards

3.1 Flashcards

1
Q

What is a mission statement?

A

A short way of a business expressing their main intent.

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2
Q

What is required form a mission statement?

A

-To be memorable
-Inspiring
-A corporate vision looks towards the future and where the business would like to be.

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3
Q

What are the uses of a mission statement?

A

> Focus- create a high level of focus from those within the organisation.
Identity- Can create a sense of identity for the organisation and it can help in establish the position in the market place the organisation will fit.
Profitability- Having strong corporate valves which are reflected in the mission statement, create profitability and employees will become more motivated and more efficient.

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4
Q

What are limitations of mission statements?

A

> Most people don’t really check them- message lost
Quite discarded
Could be biased
Not easily accessible
Supposed to align with the behaviour of the brand
Could be ambiguous.

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5
Q

What is corporate objectives?

A

> Should flow from the mission statement and corporate vision.
Usually set by senior management for the whole company.
Aimed at satisfying the shareholders.

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6
Q

What are department functional objectives?

A

> Most businesses divide up the work into departments or functions e.g sales, HR, marketing, operations, and finance.

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7
Q

What are SMART targets?

A

> S- Specific: A clear definition, often including a number.
M- Measurable: This means the achievement can be checked.
A- Achievable: A target that can easily achieved by the company.
R- Realistic: A goal that can be reached and a goal that is realistic.
T- Time: A timed target to achieve your goal.

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8
Q

What is a theory of corporate strategies?

A

A theory of Corporate Strategies is designed to achieve a competitive advantage.
- to achieve growth.

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9
Q

What are the four factors used by Ansoff?

A

> Existing market
New market
Existing product or service
New product or service

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10
Q

What corporate strategy is under existing market and existing product/ service?

A

-Market penetration (small risk)
Increases sales to the existing market or penetrating it more deeply to sell more to the same customers and to encourage them to buy more often.
E.g loyalty cards.

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11
Q

What Corporate strat is under the New market but is an existing product/ service?

A

-Market development (moderate risk)
Existing product/ service sold to a new market
E.g Colouring book for adults.

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12
Q

What corporate strategy is under the existing market but is a new product/service?

A

-Product or service development (moderate risk)
Means research and development for the new product to sell to your existing customers.
Gives them more choice
R&D takes time and could be costly

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13
Q

What Corporate strategy is under a new market and is a new product or service?

A

-Diversification (high risk)
New product or service sold in a new market (new to the company
E.g Tata company owns 116 diverse companies including Jaguar, Land Rover, Tata Steel.

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14
Q

What are uses of using Ansoff’s Matrix in developing a corporate strategy?

A

-to evaluate the relative attractiveness of growth strategies that leverage both existing products and markets vs. new ones, as well as the level of risk associated with each

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15
Q

What are limitations of using Ansoff’s Matrix in developing a corporate strategy?

A

> The Ansoff’s matrix is useful tool for looking at the different strategic options for an organisation, however it does have some limitations as it only shows part of the picture.
Help decide on a company strategy should be conducted on a SWOT and PESTLE analysis to get a much better idea of the whole picture.

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16
Q

What is Porter’s strategic matrix?

A

> Porter suggested that there were 3 generic business strategies that would get competitive advantage.
These were: Cost leadership, Cost focus, Differentiation, and differentiation focus.

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17
Q

What is cost leadership?

A

-Making products at the lowest cost, may include outsourcing, lean management.
-Useful in highly competitive markets where there are similar products.
-Customers may frequently switch supplier to gain best value.
-New entrants to the market will use low process to build customer base.

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18
Q

What is cost focus?

A
  • mostly used by local businesses
    -Useful strategy when the business wants to offer very low prices to small market segment.
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19
Q

What is differentiation?

A

> Useful strategies in highly technological markets where there are rapidly changing and evolving features of products and services.
Where customers needs are very diverse
Where the competitors in the market are all following a similar differentiation strategy.

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20
Q

What is differentiation focus?

A

> Useful strategy when the business wants to offer products and services to a small market segment.
Products or services will be differentiated and aimed at a niche market.

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21
Q

What is a stuck in the middle technique?

A

If a business failed to select one of the strategies, they would be in danger.

22
Q

Uses of Porter’s Strategic mix?

A

> It can establish a clear direction for the business to go in.

23
Q

What are limitations of Porter’s strategic matrix?

A

> Only a tool used for a business to look at their strategy and therefore it is not;
-Not as relevant in dynamic markets
-Over simplifies market structure

24
Q

What is each stage in the Boston Matrix?

A

> Question mark
Star
Cash cow
Dog

25
Q

What is a question mark?

A

> Low Market share but high market growth
Known as the problem child
This product may have just been launched on the market and is building its customer loyalty.
Products should be invested in while their market share builds.

26
Q

What is a star?

A

> High market share and high market growth
May be in the growth phase of the product life cycle
Production should remain consistent while profits are harvested.

27
Q

What’s a cash cow?

A

> High market share but low market growth
Products are reaching the maturity of their product life cycle but still have customer loyalty.
products should be produced until sales start to decline

28
Q

What is a dog?

A

> Low market share a low market growth
Products in declining sales in declining markets

29
Q

What are uses of the Boston matrix?

A

> Good starting point when reviewing an existing product line to decide future strategy and budgets.
Help businesses analyse future opportunities or problems with product portfolios
Meets customer needs which bring in revenue

30
Q

Limitations of the Boston matrix?

A

> QM products could turn into dogs which would be a waste.
Oversimplified
There could be a medium product not just low and high

31
Q

What are Kay’s distinctive capabilities?

A

> 3 distinctive capabilities that could create added value and give a business competitive advantage:
-Architecture: Relationships with employees, suppliers, customers.
-Reputation:through the customer experience
-Innovation:Bringing inventions to market

32
Q

What is strategy and tactic?

A

Strategy- more long term and an idea how to do it.
Tactic- More short term and reactive to competitor actions

33
Q

What is the SWOT analysis?

A

> Analysis planning tool
Internal considerations-Strengths and weaknesses
External consideration-Opportunities and threats

34
Q

What are strengths?

A

> Advantages of the business
What unique or low cost resources does the business have.
What do people in your market see as your strengths

35
Q

What are weaknesses?

A

> What can you improve?
What to avoid?
What are people likely seen as weaknesses

36
Q

What are opportunities?

A

> Gaps in the market
What good opportunities can you spot?
What trends are you aware of

37
Q

What are threats?

A

> Obstacles
What are competitors doing?
is changing technology threatening your position

38
Q

What can a SWOT analysis be used for?

A

> Used as a tool to formulate a strategy of growth and attack to use the businesses strengths to maximise growth in the market.
A tool to compete and defend, using strengths to minimise the market threats.
To improve and attack new markets or produce new products
To identify when change and retreat needs to occur.

39
Q

what does PESTLE stand for?

A

Political
Economic
Social
Technological
Legal
Environmental

40
Q

What is an external factor?

A

Any factor outside of the business that has an impact on normal trading.

41
Q

What is a PESTLE analysis?

A

> A business analysis tool that aims to look at external factors and how they may have an impact on the business.
This aids strategic and tactical decision making, objective setting and helps a business to reach its goal.

42
Q

What is a political factor?

A

> where a business may be affected by political laws in the UK or even through politics across the world:
-A change in government
-Gov laws, minimum wage
-Brexit and new trading blocs
-Tax rates

43
Q

What is an economic factor?

A

> Where a business should analyse how they may be affected by:
-Increase in interest rates
-Increase in inflation
-Unemployment rates
-Recession
-The business cycle

44
Q

What are social factors?

A

> Where a business should analyse how they may be affected by changes in social factors:
-A change in demographics and its impact on products produced and markets.
-Culture mix changes in the UK.
-Social trends

45
Q

What is technological factors?

A

> Where a business could examine the impact of new technologies on their operations;
-Automation, new robotics and how it can improve productivity
-Innovations in the industry
-Trading online
-New computer systems

46
Q

What is a legal factor?

A

> A business should assess how they may be impacted by changes in legislation;
-Health and safety at work act in terms of PPE and regulations
-Data protection act
-Sale of goods act
-Sex discrimination act

47
Q

What are environmental factors?

A

> A business could analyse their environmental challenges that may face the business;
-Climate change
-Weather
- Disappearance of wildlife

48
Q

What are the five forces found by Porter?

A

1) Bargaining power of suppliers
2) Bargaining power of customers
3)Threat of new entrants
4)Threat of substitutes
5)Rivalry amongst existing firms in the industry

49
Q

What is the bargaining power of suppliers and customers?

A

> Suppliers
-Limit power of suppliers by looking for new suppliers
-Merge or takeover the supplier

> Customers
-Make it too expensive for a customer to switch

50
Q

What is the threat of new entrants and substitutes?

A

> Entrants
-Create barriers to entry to prevent new entrants
-Heavily advertised to build strong brands

> Substitutes
-Continuously invest in R&D and develop patents
-Buy up patents of rivals and shelve to prevent product production

51
Q

What are rivalries amongst existing firms in the industry?

A

> The intensities of rivalries will have an impact on the business that is trying to trade;
-Larger businesses buying up rivals
-continuously introducing new products
-Heavily marketing to maintain market share

52
Q
A

Theme 3 Business (2 decks)

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