3.1 Flashcards
A mission
The overall reason for a businesses existence
A mission statement
A written statement that states the purpose of an organisation
Corporate strategy
The course or route that a business has chosen to follow to achieve its objectives
Ansoffs matrix
- market penetration : old product, old market. Low risk
- market development : old product, new market
- product development : new product, old market
- diversification : new product, new market. High risk high reward
Porters generic strategy
Analyses low cost vs differentiation in both mass and niche markets.
States that a business must choose one strategy and not to be ‘stuck in the middle’
SWOT analysis
A diagnostic tool used to identify the internal strengths and weaknesses and the external opportunities to a business
Strengths and weaknesses
Are internal to a business: •finances •resources •human resource management •marketing
Opportunities and threats
Are external to a business:
•legislation
•economic environment
•technological environment
PESTLE
The external influences on a business: Political Economical Social Technological Legal Environmental
Political environment PESTLE
Government actions that impact on the strategic and functional decisions made by a business:
•grants for specific purposes
•provide training
•regulation: the creation of rules and sanctions
Economic environment PESTLE
The state of the world or national economy:
•interest rates
•exchange/interest rates
•taxation
Social environment PESTLE
Influenced by the make up of humans within a specific area or business:
•demographics
•health
Technological environment PESTLE
The ongoing development of invention innovation and sharing of technology or processes:
•internet and intranet
•social media
•handheld computers
Legal environment PESTLE
Legislation in a country a business is operating in:
•consumer/employee/environmental protection
Environmental PESTLE
Legislation to reduce negative impacts on the natural environment
