3.1 business objectives and strategy

Question 1

What is the aim?

Answer 1

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

Question 1

What is the hierarchy of objectives ?

Answer 1

Aim
Mission Statement
Corporate objectives
Functional Objectives

Question 2

What is a mission statement ?

Answer 2

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

Question 3

What is a corporate objective ?

Answer 3

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

Question 4

What is a functional objective ?

Answer 4

The day to day goals of functions or departments within the business, derived from corporate objectives

Question 5

What are the smart objectives ?

Answer 5

S - specific
M - measurable
A - achievable
R - realistic
T - time

Question 6

What is a stakeholder ?

Answer 6

individuals or groups that are affected by the actions of a business

Question 7

What is ansoffs matrix ?

Answer 7

A tool for businesses with growth objectives by identifying a corporate strategy and the level of risk

Question 8

What is inside ansoffs matrix ?

Answer 8

Market penetration - existing market existing product
Market development - new market existing product
Product development - existing market new market
Diversification - new product new market

Question 9

What is porters generic strategic matrix

Answer 9

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)

Question 10

What is the components in porters generic strategy ?

Answer 10

Cost leadership - mass & cost
Differentiation - mass and differentiation
Cost focus - niche
Cost differentiation - niche

Question 11

What is the Boston matrix ?

Answer 11

The Boston Matrix is a 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

Question 12

What is the star ?

Answer 12

High growth
High market share

Question 13

What is the question mark ?

Answer 13

Products with high growth and low market share

Question 14

What are cash cows ?

Answer 14

Products with low growth and high market share

Question 15

What are dogs ?

Answer 15

Products with low growth and low market share

Question 16

What is a distinctive capability ?

Answer 16

When a business has a particular strength that is very difficult for competitors to copy

Question 17

What are some examples of distinctive capabilities ?

Answer 17

Operational skills and expertise
Relationships and networks
Reputation and image
Innovation

Question 18

What are strategic decisions ?

Answer 18

medium to long term planning to achieve corporate and functional objectives

Question 19

What are some strategic decisions ?

Answer 19

Enter a new overseas market

Withdraw an obsolete product from the sale

Merge with a competitor

Question 20

What are tactical decisions ?

Answer 20

made to support the overall strategy and are usually short-term

Tactical decision-making will also have an impact on a business’s human, financial and production resources

Question 21

What is swot analysis ?

Answer 21

Identify strengths, weaknesses, opportunities, threats

Question 22

What some strengths of a business?

Answer 22

Skilled staff
Possession of assests
Effective leadership

Question 23

What are some weaknesses?

Answer 23

Ways in which businesses lag behind competitors

Capital limitations

Lack of competitive advantage

Lack of usp

Question 24

What are some opportunities ?

Answer 24

Developing markets

Social or technological developments

Economic indicators becoming more favourable

Question 25

What are some threats?

Answer 25

New or emerging competitors gaining a market share

Changing legal or political environment

Negative press coverage

Question 26

What is pestle analysis and what does it stand for with examples ?

Answer 26

The external factors that impact the activities and outcomes of a business

Political - tax, trade
Economic - inflation, exchange rates
Social - education, ethics, health
Technological - r&d, quality, production
Legal - taxation, employment
Environmental - energy available, disposal of materials, air quality

Question 27

How has the market changed ?

Answer 27

• Growth of internet
• Businesses leave and enter the market integration
• Changes in regulatory framework
• Globalisation
• Changes in consumer tastes & preferences

Question 28

What are porters 5 forces - definition ?

Answer 28

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

Question 29

What are the components in porters 5 forces and what do they mean ?

Answer 29

Threat of new entry - new competitors enter depending on barriers to entry
Buyer power - dependent on how many customers a business has
Supplier Power - significant power if there is a small no. of suppliers
Threat of substitution - customers can swap business products for those of a rival
Industry rivalry - when there are many competitors selling similar products