3.1 - Summary Flashcards
Why do businesses have mission statements?
Mission statements can help a business clearly outline what they want to achieve as a business which can allow them to evaluate how successful they were in a year based on whether they did so. Mission statements can also help them secure external funding.
What is the relationship between the mission statement and corporate objectives?
Mission statements and corporate objectives must both be reviewed regularly to check if their current strategy/efforts match both
Identify three typical objectives that corporate objectives focus on
Growth/Profitability/Social Responsibility
When might diversification be a suitable strategic option?
When the business cannot compete with the prices of their rivals while still making substantial profits.
Identify three factors that a business may consider when choosing a strategic option
Actions of competitors/Target Customer/Niche or Mass Market
What might make a competitive advantage sustainable?
Brand loyalty from customers and the business’ reputation
Identify three factors a business may consider when choosing a strategy
Stakeholders/Shareholders/External Environment
Why does the government impose environmental legislation?
To protect the environment and minimise business impact on it
What is an oligopoly?
An oligopoly is a market shared by only a small number of firms
What factors might give buyers power in a market?
Lack of product differentiation / easy to switch between competitors/price sensitive products
What is a substitute product?
An alternative product that offers the same benefits to the consumer
How might a business compete with new entrants in a market?
Innovation/Growth/Strong Customer-Business Relationship
