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MS REZEL BUSINESS > 3.1 Business Objectives and Strategy > Flashcards

3.1 Business Objectives and Strategy Flashcards

1
Q

What is a mission statement?

A

The main purpose and vision of a business. Its a short way of expressing the businesses intent

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2
Q

What is a corporate objective?

A

quantifiable statement of business aims which should include measurable targets

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3
Q

What is a department objective?

A

aims set by each department in order to achieve corporate objectives

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4
Q

What are uses of mission statements?

A
  • provides focus and shows direction
  • identity - helps establish market place position
  • profitability
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5
Q

What are limitations of mission statements?

A
  • can be unrealistic
  • waste of management time and resources
  • can lead to conflicts
  • can be ambiguous
  • can become obsolete as business grows
  • can be seen as another pr tool
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6
Q

What is corporate strategy?

A

The course that a business follows to achieve it’s corporate objectives

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7
Q

What is market penetration?

A

Existing products in existing markets (growth strategy)
Lowest possible risk and therefore lowest potential reward

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8
Q

What is ansoffs matrix?

A

A tool that assesses the risk of 4 growth strategies

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9
Q

What is product development?

A

A growth strategy where a business useS a new product in an existing market

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10
Q

What is market development?

A

A growth strategy where a business uses on existing product in a new market

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11
Q

What is diversification?

A

A growth strategy where a business creates a new product for a new market.

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12
Q

Approaches to market penetration?

A
  • Changes to the marketing mix
  • gain market share from competitors
  • encourage more consumption
  • extension strategy
  • least costly as they know the market
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13
Q

problems with market penetration?

A
  • Competitor reaction
  • relatively short term
  • market may already be saturated
  • cannibalisation
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14
Q

Approaches to market development?

A
  • New geographical markets
  • new product dimensions/packaging
  • New distribution channels
  • different pricing policies to attract different income customers
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15
Q

problems with market development?

A
  • More risky than P development - overseas expansion
  • existing products may not suit new markets
  • may require high market research costs
  • alienation of current customer
  • business may not understand new markets
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16
Q

Approaches to product development?

A
  • Launch substantially improved version of existing products (innovation)
  • introduce new complementary products
  • new product innovation
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17
Q

Dangers of product development?

A
  • Cannibalisation
  • may shorten PLC of existing products
  • damage to brand
  • high r&d costs
  • requires development of new skills
  • requires market research
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18
Q

Approaches to diversification?

A
  • R&d into new products and market research into new markets
  • acquisitions of other businesses
  • highest potential reword
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19
Q

Dangers to diversification?

A
  • Relies on heavy investment
  • cultural differences
  • brand name may be diluted (may also bring attention to it)
  • riskiest strategy due to lack of information of new markets
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20
Q

What are the uses of ansoffs matrix?

A
  • identify all current products /services and markets
  • allows for consideration of future options
  • shows risk and opportunity
  • identify potential new markets / strategies
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21
Q

Limitations of ansoffs matrix?

A
  • Only shows part of the picture
  • oversimplifies the market
  • large MNCs may need thousands of suboptions and strategies
  • may need no do a swat / pestle analysis to gain a better idea of the full picture
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22
Q

What is porters matrix?

A

A matrix that categorises the marketing strategies a business con adopt to try and achieve a competitive advantage

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23
Q

What does porters matrix analyse?

A

Cost leadership and differentiation

24
Q

What is the Boston matrix?

A

Planning tool that helps managers plan for a balanced product portfolio
Compares market share and growth.

25
Q

Uses of Boston matrix?

A
  • Good starts point when reviewing an existing product
  • Strategise next step for product
  • analyse future opportunities and problems with their market portfolio
  • transfer earnings from cash cows to question marks.
26
Q

Limitations of Bostons matrix?

A
  • May not show true nature of product
  • too simplistic
  • high market share doesn’t always mean high profit (doesn’t account for costs)
27
Q

What are the 4 quadrants of the Boston matrix?

A
  • Question mark
  • star
  • cash cow
  • dogs
28
Q

What are the 4 quadrants of porters matrix?

A
  • Cost leadership
  • focused cost leadership
  • differentiation
  • focused differentiation
29
Q

What is Kays idea?

A

3 capabilities could create added value and give a competitive advantage

30
Q

what are Kays 3 capabilities?

A
  • architecture
  • reputation
  • innovation
31
Q

What are the terms for a strategic decision?

A
  • long term direction of the business
  • what the business will do to meet aims
  • proactive decision making
  • forward thinking, future planning
32
Q

What are the terms for a tactical decision?

A
  • short term decisions
  • how strategy is implemented
  • reactive to competitors
  • present day thinking, what is happening now that needs dealing with
33
Q

What does SWOT stand for?

A

strength
weakness
opportunities
threats

34
Q

Advantages of SWOT analysis?

A
  • logical structure
  • focus on strategic issues
  • encourages analysis of external environment
35
Q

disadvantages of SWOT analysis?

A
  • too often lacks focus
  • can became easily out of date
  • independent
36
Q

What is pestle analysis?

A

a framework for assessing the key features of the external environment facing a business

37
Q

What does pestle stand for?

A

political
economics
social
technological
legal
ethical

38
Q

What is the political part of PESTLE?

A
  • competition policy
  • industry regulation
  • govt spending
  • tax policies
  • business policy and incentives
39
Q

What is the economic part of PESTLE?

A
  • interest rates
  • consume spending and income
  • exchange rates
  • business cycle
  • inflation
  • unemployment rates
40
Q

What is the social part of PESTLE?

A
  • demographic change
  • impact of pressure groups
  • consumer taste and fashion
  • changing lifestyle
41
Q

What is the technological part of PESTLE?

A
  • disruptive technologies
  • adoption of mobile technology
  • new production process
  • big data and dynamic pricing
42
Q

What is the ethical/environmental part of PESTLE?

A
  • sustainability
  • tax practices
  • ethical sourcing
  • pollution
43
Q

What is the legal part of PESTLE?

A
  • employment law
  • minimum wage
  • health and safety laws
  • environmental legislation
44
Q

What is porters 5 forces?

A

framework for analyzing the nature of competition within an industry

45
Q

why does rivalry vary between businesses?

A
  • size
  • structure
  • profitability
  • customer wants
  • distribution channels
  • product life cycle
  • alternatives
46
Q

what does a low profit industry entail?

A
  • strong suppliers and customers
  • low entry barriers
  • many subs
  • intense rivalry
47
Q

what does a high profit industry entail?

A
  • weak suppliers and customers
  • high entry barriers
  • few subs
  • little rivalry
48
Q

what are the 5 forces?

A
  • bargaining power of customers/suppliers
  • threat of new entrants
  • threat of subs
  • rivalry among business
49
Q

what are the barriers to entry?

A
  • loyalty
  • econ of scales
  • vertical integration
  • access to tech
  • expertise
50
Q

what are threat of new entrants?

A
  • increased competition
  • high barriers = strong market position
  • low barriers = weak market position
51
Q

what is the bargaining price of suppliers?

A
  • sell at high prices
  • squeeze industry profits
52
Q

why are suppliers powerful?

A
  • few suppliers
  • selling scarce resources
  • cost of switching is high
  • customer is unimportant
  • few subs
53
Q

how can you limit supplier power?

A
  • threaten to swap
  • backward vertical integration
54
Q

what is the bargaining power of a customer?

A

they exert pressure on having lower prices

55
Q

how do you limit consumer power?

A
  • forward vertical integration
  • increase the cost of swapping
56
Q

what is the threat of substitutes?

A
  • more subs limit the pricing strategies that can be used
  • lower profit
  • customer loyalty and availability of subs limits the threat
  • role of technology allows for rapid creation of subs
57
Q

what are the determinants of rivalry?

A
  • number of competitors
  • market size and growth prospects
  • product differentiation
  • power of buyers and availability of subs
  • capacity utilization
  • cost structure of industry
  • exit barriers

MS REZEL BUSINESS (8 decks)

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