3.1 - Business objectives and strategy

Question 1

Define a mission statement

Answer 1

A formal summary of a businesses aims, values and their main reason for existence

Question 2

Describe the 4 parts of Ansoffs Matrix

Answer 2

Market penetration
* Existing product, existing market, (low risk)
* E.g. promotional campaign, price reduction, expanded distribution channels, rebranding

Market Development

• Existing product, new market (medium risk)
• E.g. franchising, geographic or demographic expansion, starting eccomerce

Product Development
* New product, existing market (medium risk)
e.g. New features, line extension, new flavour drinks

Diversification
* New product, new market (high risk)
* E.g. Tesco offering credit card, Amazon offering video streaming

Question 3

Explain the critical appraisal of mission statements and corporate aims

Answer 3

Critically appraising mission statement and corporate objectives means to reassess their suitability by considering factors like are they aligned to social trends and do they align with the corporate vision.

Question 4

Describe Kays Distinctive Capibilities

Answer 4

Kay’s Distinctive Capabilities Framework, developed by economist John Kay, identifies three critical organizational capabilities that can give a company a competitive advantage if leveraged effectively:
* Architecture: Refers to the way the company is organized, with clear corporate objectives, leaderships structure and focused employees.
* Reputation: How customers and potential customers perceive the company, brand identity, differentiation stratergy, added value.
* Innovation: Ability to change, product development stratergy (Ansoff)

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