3.1 Business Strategies

Question 1

Mission Statement

Answer 1

A short way of a business expressing their main intent

Question 2

Why are mission statements important?

Answer 2

Inspire Workers
Lets customer know what they’re about
Improves strength of brand
Provides a sense of direction for staff
Introduces core principles to potential investors

Question 3

Corporate Objectives

Answer 3

Set by senior management for the whole company
Aimed at satisfying the shareholders so may be related to profit or dividends

Question 4

Department Objectives

Answer 4

Divide work into departments or functions: sales, marketing, operations, finance
Each department sets their own objective - these should follow the corporate objectives

Question 5

Limitations to mission statements

Answer 5

Can be unrealistic and optimistic
Can be waste of management, time and resources
Can lead to conflict
Can be unclear
Can become obsolete as the business develops

Question 6

Ansoffs Matrix

Answer 6

Suggests that a business attempts to grow depends on whether if markets new or existing products in new or existing markets

Question 7

Market Penetration (Existing Product + Existing Market)

Answer 7

Increasing sales to existing market, or penetrate it more deeply- sell more to the same customers- encourage them to order more often- loyalty schemes e.g. boots advantage card

Question 8

Product Development (New Product + Existing Market)

Answer 8

A market you’re already in, but a new product or service is developed

Question 9

Market Development (Same Product + New Market)

Answer 9

A growth strategy where the business seeks to sell its existing products into new markets

Question 10

Diversification (New Products + New Market)

Answer 10

When a business markets new products in new markets. Much more risky because the business is moving into markets with little to no experience.

Question 11

Differentiation- Differentiate to the whole market

Answer 11

Differentiation involves making your
products/services different from (and
more attractive) than those of your
competitors.

Question 12

Cost Focus

Answer 12

a business takes a lower-cost
advantage in one or a small number
of market segments

Question 13

Differentiation Focus

Answer 13

A classic niche market strategy, a
company will seek to differentiate
within just one or a small number of
target market segments

Question 14

PESTLE Analysis

Answer 14

A business analysis tool that aims
to look at external factors and how they
may have an impact on the business. These being Political, Economic, Social,
Technological, legal and
environmental

Question 15

Strategy

Answer 15

Long-term goals and how
you’re planning to achieve them.
Long term direction of the business
What the business will do to meet its aims and objectives
Forward thinking, future planning

Question 16

Tactical

Answer 16

Tactics are much more concrete and are often
oriented toward smaller steps and a shorter time
frame along the way
Reactive to competitor actions

Question 17

The Distinctive Capabilities: Architecture

Answer 17

Relational contracts within or around the organisation of customers, suppliers and within employees
RELATIONSHIPS

Question 18

The Distinctive Capabilities: Reputation

Answer 18

This includes customer’s own experience, quality signals,
guarantee, word of mouth spreading, warranty, association with other
brands and staking the reputation, once it is established

Question 19

The Distinctive Capabilities: Innovation

Answer 19

Bringing inventions to market (this can include new
processes and ways of doing things)