3.1 - objectives + strategies

Question 1

Mission Statement

Answer 1

a short, specific written statement of the reason a business exists and what it wants to achieve.

P: encourages staff to work towards a common goal.
N:limited doesn’t go into details + doesn’t give tactics or corporate strategies.

Question 2

Corporate objectives

Answer 2

-Objectives that relate to the business as a whole. Usually set by top management. set into short/medium- term goals. depends on the size of the business.

• mission statement- corporate objectives - department objectives.

Question 3

Department objectives (functional objectives)

Answer 3

-aims set directly for the area of responsibility, used to overall help reach the corporate goal.

P:everyone working towards a goal - coordination - motivating.
L:any objectives have to be aligned with their mission statement otherwise they may lose stakeholders.

Question 4

SMART goals

Answer 4

-Specific, Measurable, Agreed, Realistic, Timely

ex) Increase revenue by 5% within 12 months.

Question 5

Corporate Strategies

Answer 5

-broad approaches developed for achieving a firm’s goals.
-strategic/tactic
-impacts: human, physical,financial.

strategic - long term plan of action.
tactic- short-term plan.

Question 6

Ansoff’s Strategic Opportunity Matrix

Answer 6

-market penetration, market development, product development, diversification.

market penetration- increasing market share in existing market.
ex)increasing market share from 25% to 30% .
-sales promotion,pricing strategies,advertising.

market development- selling existing product to new market.
ex) lego cars sold to older demographic.
-new promotions

product development- selling new products in existing market.
-gives competitive advantage

diversification - new product, new market.
-risky.

(look at graph in book - p205)

Question 7

P+N of ansoff’s growth strategies
+uses/limitations.

Answer 7

USES:
-good tool for comparing the level of risk.
-helps decide direction of strategic growth.
-allows managers to think about unexpected risks.

LIMITATION:
-isn’t a dynamic tool, does not take into account of businesses competitors or how it may react .
-Not useful for large, multinational businesses, better for small/medium sized businesses that are established and looking to grow.

Question 8

Porter 3 generic strategies

Answer 8

-cost leadership,differentiation,focus.
cost leadership

differentiation
-unique products so u can set the price as high as you want
-stronger branding,quality products, innovative.

focus
-focus on niche markets.
-used for firms with loyal customers.

Question 9

Kay’s Model of 3 Capabilities

Answer 9

-something a business can do that other businesses can’t do so it sets them apart.
-competitive advantage - adds value.
- the 3: Architecture,reputation and innovation.

Architecture: the relationship w stakeholders.
(stable relationship, communication- increase sales)

Reputation: customer satisfied.
(customer service, product that is high quality)

innovation: investing in resources + development
(= competitive advantage)

Question 10

Corporate Strategies : sustainable and appropriable

Answer 10

sustainable: when a business has reached kays 3 capabilities, now needs to maintain over time.

Appropriable: that other businesses aren’t able to copy, trademarks etc.

Question 11

boston matrix - for investing in products.

Answer 11

: product portfolio analysis where a product is in market growth and market share.
N:
-simplified, only works for medium/small businesses.
etc - check the book P107

Question 12

SWOT analysis

Answer 12

strengths, weaknesses, opportunities, threats
-planning tool, to plan strategies.

Internal factor: strength + weakness
ex)employees,marketing etc

External:opportunities + threats,
beyond control, business has to fully understand to react.

Question 13

PESTLE

Answer 13

Political, Economic, Social, Technological, Legal, Environmental.

• used in opportunities + threats to businesses.