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Business theme 3 > 3.1 Business objectives and strategy > Flashcards

3.1 Business objectives and strategy Flashcards

1
Q

List the hierarchy of objectives from top to bottom

A

Aims
Mission statement
Corporate objectives
Functional objectives

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2
Q

What is an aim?

A

What the business is looking to achieve in the long term

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3
Q

What is a mission statement?

A

An expression of a businesses overall aim as well as its core values and context

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4
Q

What is a corporate objective?

A

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

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5
Q

What is a functional objective

A

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

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6
Q

What does the acronym SMART stand for

A

Corporate goals should be…
Specific
Measurable
Agreed
Realistic
Time-bound

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7
Q

Why do functional objectives need to be carefully aligned across departments

A

So that all parts of the business are working towards the same shared goal

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8
Q

What is competitive advantage

A

Anything that gives a company an edge over its competitors

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9
Q

What is Ansoffs matrix?

A

A tool for businesses with a growth objective

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10
Q

What is Ansoffs matrix used for?

A

To identify an appropriate corporate strategy and identify the level of risk associated with the chosen strategy

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11
Q

What are the axis of Ansoffs matrix?

A

Horizontal- Market (existing and new)
Vertical- The product (new and existing)

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12
Q

What are the 4 strategies to achieve growth in Ansoffs matrix?

A

Market penetration (existing product in an existing market)
Market development (existing product in a new market)
Product development (New product in existing market)
Diversification (New product in new market)

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13
Q

What is the least risky strategy to achieve growth (according to Ansoffs matrix)

A

Market penetration

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14
Q

What is the most risky strategy to achieve growth (according to Ansoffs matrix)

A

Diversification

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15
Q

What is market penetration

A

Selling more (existing) products to existing customers by encouraging more regular use of the product, increased usage of the product and brand loyalty of customers

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16
Q

What is brand loyalty

A

Where consumers continue to buy the same brand of goods rather than competing brands

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17
Q

What is market development

A

Finding and exploiting new market opportunities for existing products.
This can be done by entering new markets abroad or repositioning the product and selling to different customers

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18
Q

What is product development

A

Selling new or improved products to existing customers
This can be done by developing new versions or upgrades and redesigning packaging

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19
Q

What is diversification?

A

Targeting new customers with entirely new or redeveloped products.
For example Greggs launching a range of clothing products.

20
Q

What is the use of porters generic strategic matrix?

A

To identify a range of strategies a business might adopt considering its source of competitive advantage and the scope of the market which they operate in

21
Q

What are the two axis of porters generic strategic matrix

A

Market scope (Niche and mass)
Competitive advantage (Cost and differentiation)

22
Q

What does SWOT stand for?

A

Strengths
weaknesses
opportunities
Threats

23
Q

What is SWOT used for

A

To identify internal strengths and weaknesses of a business. As well as external opportunities and threats

24
Q

What is a strength (SWOT)

A

What the business is good at

25
Q

What is a weakness (SWOT)

A

What the business does poorly

26
Q

What are opportunities for a business (SWOT)

A

Options a business may exploit to enjoy further success

27
Q

What are threats to a business (SWOT)

A

Hazards that have the potential to damage business performance

28
Q

What is PESTLE used for

A

To examine the external factors that are likely to impact the activities and outcomes of a business

29
Q

What does the acronym PESTLE stand for

A

Political
Economic
Social
Technological
Legal
Environmental

30
Q

How can managers use PESTLE to help the business

A

They can use the information gathered to understand the potential threats and to identify future difficulties so that they can take action to help avoid and eliminate them

31
Q

What is meant by a political factor in PESTLE analysis

A

The extent to which local and national government is expected to influence the business

32
Q

What is meant by economic factor in PESTLE analysis

A

The extent which economic indicators are expected to directly impacted business performance. e.g. inflation or exchange rates

33
Q

What is meant by the social factor in PESTLE analysis

A

The extent to which personal attitudes and values, culture and demographic change are expected to affect the business. e.g. Education and religion

34
Q

What is meant by the technological factor in PESTLE analysis

A

How technological change and innovation are expected to impact the business. e.g. research and development

35
Q

What is meant by the legal factor in PESTLE analysis

A

How changes in laws and regulations are expected to impact the business. e.g. Taxation and red tape

36
Q

What is meant by the environmental factor in PESTLE analysis

A

How changes in attitudes and government policy towards environmental protection is expected to impact the business. e.g. How materials are disposed and how expensive/available energy is

37
Q

Why might a structure of a market change over time?

A

New and old businesses join and leave the market
globalisation
changes in consumer tastes
Growth and innovation of technology

38
Q

What is meant by barriers to entry

A

Conditions that make it difficult/ expensive for a firm to enter a market to compete with he existing suppliers

39
Q

What does porters five forces identify

A

Identify and analyse an industrys competitive forces

40
Q

What are the five forces (porters five forces)

A

Threat of new entry
Buyer power
Threat of substitution
Supplier power
Industry rivalry

41
Q

What is meant by the force industry rivalry (porters five forces)

A

Many competitors selling similar products means the business has less power

If it offers products in an industry with little competition then it has more power and cam dominate the market

42
Q

What is meant by the force threat of new entry (porters five forces)

A

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 and the opposite

43
Q

What is meant by the force buyer power (porters five forces)

A

If a business sells to a small number of customers then the customers have more power to negotiate lower prices

or if a business sells to a high number of customers then the customers have less power

44
Q

What is meant by the force supplier power (porters five forces)

A

When a business has a lot of choices over the suppliers then it can choose who it buys from

or supplier can hold significant power over a business if it offers a specialised component that not many suppliers in the market have

45
Q

what is meant by the force threat of substitution (porters five forces)

A

Where customers can easily swap a business products for those of a rival

or where a substitution is unlikely

Business theme 3 (1 decks)

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