3.1

Question 1

what is the point of corporate objectives?

Answer 1

Aims and objectives serve as a guide for the businesses’ overall strategy and direction, helping to focus efforts and resources toward a common purpose

Question 2

what is an aim?

Answer 2

What the business is looking to achieve in the long term?

Often expressed as an overall vision and describes the businesses reason for being

Question 3

What is a Mission Statement?

Answer 3

An expression of a business’s overall aim as well as its core values and context

Often expressed in inspirational terms to provide direction and a common purpose for employees

Question 4

what is a corporate objective

Answer 4

The specific performance goals set by senior management for the business to achieve over time

Corporate objectives may focus on achieving specified levels of market share , profit, sales growth or new product/market development

Question 5

what is a functional objective

Answer 5

The **day to day goals **of functions or departments within the business

Question 6

what does the SMART stand for in smart objectives

Answer 6

Specific
Measurable
Agreed
Realistic
Time-bound

Question 7

what is Ansoff’s matrix?

Answer 7

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

Question 8

ansoffs matrix

market penetration

Answer 8

• existing products existing market
• done by encouraging : More regular use of the product
  Increased usage of the product
• least risky

Question 9

ansoffs matrix

Market development

Answer 9

• new market same product
• can be done by : repositioning and seeking complementary locations

pro: know the product -> expertise allows for more effective marketing and sales strategies in the new market.
con: risky ->lose money

Question 10

ansoffs matrix

Product Development

Answer 10

• new product existing customers

pro: meets changing customer needs -> enhance customer loyalty -> repeat purchase

con: lots of r and d -> expensive -> may not make that money back

Question 11

ansoffs matrix

diversification

Answer 11

• new product new market

pro: spread risk -> protects business from product and market related downturns -> less dependancy on single revenue stream

con: High Complexity and Cost: -> requires most investment and research (building new distribution channels) -> cash flow problems / covering day to day expenses

Question 12

what is porters strategic mix

Answer 12

Porter’s Generic Strategic Matrix identifies a range of strategies a business might adopt considering price product anf scope

Question 13

porters strategic mix

cost leadership

Answer 13

-** cost** compentitive advantage

pro: By minimizing costs -> company can offer lower prices than competitors -> attracting price-sensitive customers -> potentially increasing market share.
pro: create significant barriers to entry for new competitors-> as they may struggle to match the low costs and prices.

con: emphasis on cost-cutting may limit the company’s ability to invest in innovation and new product development -> potentially leading to stagnation.

Question 14

differentiation

Answer 14

• differentiation competitive advantage

pro: can foster brand loyalty among customers -> can lead to repeat purchases and positive word-of-mouth -> repeat purchases and less money on marketing

con: can be costly, as it may require investment in research, development, design, marketing, and branding -> This can erode profit margins and increase the risk of financial strain. ->** bad dividends / cant sustain differentiation **

Question 15

what is portfolio advantage

Answer 15

carrying out a detailed evaluation of its full range of products in order that appropriate strategies may be identified and pursued

Question 16

what is the boston matrix

Answer 16

** portfolio analysis tool** that considers the relative market share of a firm’s products and the rate of growth within the market in which each product is sold

pro:helps evaluate their product portfolio by identifying which products generate the most value and which ones may require further investment or divestment.

con:can be subjective and may vary depending on the criteria used for measurement. Different interpretations or biases may lead to inconsistent results and decision-making.

Question 17

what is a distinctive capability?

Answer 17

When a business has a particular strength that is very difficult for competitors to copy, it has a distinctive capability

Question 18

The Effects of Strategic Decisions on Resources

Withdraw an obsolete product from the sale

Answer 18

• Fewer workers required as output is likely to be lower -> so redundancies may be needed -> Redundancy payments or retraining of staff may incur significant short-term cost

Question 19

The Effects of Strategic Decisions on Resources

Merge with a competitor

Answer 19

• Where staff roles are duplicated redundancies or redeployment may be required
• Duplicated capital equipment and property may be sold to create income
• Techniques and knowledge can be shared between former rivals

Question 20

what is SWOT analysis

Answer 20

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

Question 21

pros of swot analysis

Answer 21

• Strategic Planning: highlights their strengths and weaknesses -> more informed decision making -> less risk

Question 22

cons of swot analysis

Answer 22

• lack of prioritasion ->spread too thin to make an impact -> no competitive advantage

Question 23

what is PESTLE?

Answer 23

PESTLE analysis examines the external factors that are likely to impact the activities and outcomes of a business

Question 24

what does pestle stand for?

Answer 24

Political
Economic
Social
Technological
Legal
Environmental

Question 25

pro of PESTLE analysis

Answer 25

PESTLE analysis provides a comprehensive overview of external factors affecting a business ->helps businesses gain a holistic understanding of their operating environment -> enabling informed decision-making and strategic planning -> proactive approach allows businesses to adapt to changes in the external environment and capitalize on emerging trends, -> long-term sustainability and competitiveness.

Question 26

con of PESTLE

Answer 26

can be overwhelming and time-consuming Analyzing each factor comprehensively requires significant resources and expertise may lead to analysis paralysis or superficial assessments, limiting its effectiveness suboptimal strategies and missed opportunities

Question 27

what are porters 5 forces?

Answer 27

Porter’s Five Forces identify the key pressures on an industry that impact the ability of a business to compete with rivals

Question 28

# porters 5 forces Industry Rivalry

Answer 28

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 When a business offers products in an industry with little or no competition it has more power, can use premium pricing and dominate the market

Question 29

# porters 5 forces Threat of New Entry

Answer 29

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 Where the barriers to entry are too high for new businesses to gain a foothold and compete in the market the threat of new entrants is low

Question 30

# porters 5 forces Buyer Power

Question 31

# porters 5 forces Buyer Power

Answer 31

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**

Question 32

# porters 5 forces Supplier Power

Answer 32

Wher business has lot of choices It is likely to be able to shop around for lower price Where supplier has significant power over business as a result of offering a specialised component or where there is a small number of suppliers in the market 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

Question 33

Threat of Substitution

Answer 33

Where** customers can 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** Where substitution is unlikely a business has significant market power It is likely to be able to charge a high price for its products and may be less inclined to innovate