Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

A LEVEL BUSINESS - TH > 3.1a business objectives and strategy > Flashcards

3.1a business objectives and strategy Flashcards

1
Q

what is an aim?

A

a long-term goal (1 year +)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what is an objective?

A

a short-term goal that helps a business to achieve its aim

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what do corporate objectives and mission statements do?

A

outline what the business aims to achieve:
↳ it guides the actions and strategy of business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what is a mission statement?

A

it explains the purpose of a business (why it exists)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

who does the mission statement relate to?
(+ examples)

A

all stakeholders
(investors, customers, employees, society)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

what does the mission statement focus on?

A

-the values of the business
-the importance of different stakeholder groups
-the impact the business intends to have on society
-the aims of the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

what is a mission statement not intended to be?

A

-a statement of objectives or what the business does
-a statement of how the business intends to compete / position itself in the market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

hierarchy of objectives:

A

-aim
-mission
-corporate objectives
-functional objectives
-business unit / individual target

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

some of the influences on a mission statement?

A

-the values of the founder(s)
-the industry the business is in
-the size of the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what makes a good mission statement?

A

-a clear sense of business purpose
-excites, inspires, motivates, guides
-easy to understand & remember
-differentiates business from competitors
-for all stakeholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

what can mission statements be used to develop?

A

corporate objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

EXAM TIP!! what may i be asked to do with mission statements in a test?

A

-critical appraisals
-assess the importance of

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

critical appraisal of nike’s mission statements:

‘to bring inspiration and innovation to every athlete in the world’

A

-may be outdated
-nike is seen more as an everyday fashion brand now

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

common criticisms of mission statements:

A

-not always supported by the actions of the business
-often too vague
-can be outdated
-can be unmemorable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

where do corporate objectives fit in on a hierarchy?

A

mission
→
vision
→
aims or goals
→
corporate objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

what is the vision of a business?

A

the overall aspiration (hope/ambition) of the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

what is a corporate objective?

A

it quantifies the mission of a business and sets measurable targets for the whole business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

hierarchy of business objectives:

A

(increasingly strategic)

-mission
-corporate / strategic
-functional
-team
-individual

(increasingly detailed)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

example of corporate objective:

A

market share of 12%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

example of a functional objective:

A

sales per customer of £45

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

example of a unit objective:

A

shop sales of £500,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

what is the purpose of corporate objectives:

A

-to measure the performance of the whole business
-to inform decision-making

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

what are functional areas of a business?

A

marketing, operations, HR and finance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

examples of key focuses for corporate objectives:

A

-market standing
-innovation
-productivity
-resources
-profitability

-management
-employees
-public responsibility

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

key areas: market standing

A

market share, customer satisfaction, product range

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

key areas: innovation

A

new products, better processes, using technology

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

key areas: productivity

A

optimum use of resources, focus on core activities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

key areas: physical and financial resources

A

factories, business locations, finance, supplies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

key areas: profitability

A

level of profit, rates of return on investment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

key areas: management

A

management structure:
-promotion
-development

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

key areas: employees

A

organisational structure, employee relations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

key areas: public responsibility

A

compliance with laws; social and ethical behaviour

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

what are functional objectives?

A

-they are set for each key business function
-they ensure that the corporate objectives are achieved

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

SMART

A

S - specific
M - measurable
A - achievable
R - realistic
T - time bound

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

how can functional objectives help support corporative objectives:

corporate objective: increase sales

A

functional objective: successfully launch five new products in the next two years (marketing )

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

how can functional objectives help support corporative objectives:

corporate objective: reduce costs

A

functional objective:
increase factory productivity by 10%
(operations)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

how can functional objectives help support corporative objectives:

corporate objective: increase cash flow

A

functional objective: reduce the average time taken by customers to pay invoices from 75 to 60 days
(finance)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

how can functional objectives help support corporative objectives:

corporate objective: improve customer satisfaction

A

functional objective:
achieve a 95% level of high customer service (people)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

internal influences on corporate objectives:

A

-who are the business owners & what do they want to achieve?
-attitude to profit
-ethical stance
-organisational structure
-leadership
-stakeholder influence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

external influences on corporate objectives:

A

-short termism
-economic environment
-political/legal environment
-competitors
-social & technological change

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

external influences: what is short termism?

A

is there external investor pressure to focus on and achieve short term objectives at the expense of long term strategy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

external influences: examples of economic factors

A

-economic growth
-consumer spending
-interest rates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

what is strategic direction?

A

it involves a business choosing which markets it will operate in and which products it will provide

44
Q

why is strategic direction important?

A

because the external environment is constantly changing and businesses must develop and compete in areas that make the best use of their strengths and core competencies

45
Q

what is ansoff’s matrix?

A

a planning tool that businesses can use to determine its product and market strategy

46
Q

what does ansoff’s matrix offer?

A

four strategies based on the products’ newness and the firm’s understanding of the market

47
Q

existing products & existing markets

A

market penetration

48
Q

what is market penetration?

A

a strategy to boost sales of current products in the current market

49
Q

aim of market penetration:

A

-to increase market share
-get existing customers to buy more

50
Q

possible approaches of market penetration:

A

-increase promotional activities
-changing the pricing model if the product is price sensitive
-build brand image
-focus on increasing repeat purchase by developing customer loyalty

51
Q

benefits of market penetration:

A

-low risk
-the product and market are familiar to the business → unlikely to need significant market research
-limited investment requirement

52
Q

drawbacks of market penetration:

A

-possibly limited growth potential
-business becomes vulnerable if it doesn’t innovate

53
Q

new products & existing markets

A

product development

54
Q

what is product development?

A

a business introduces new products into existing markets

55
Q

possible approaches of product development:

A

-conduct market research with existing customers to identify areas for improvement/innovation
-divert funds into product development

56
Q

benefits of product development:

A

-the business is familiar with customers (a great way of using brand identity)
-responds to customer needs

57
Q

drawbacks of product development:

A

-product development takes time and can be expensive
-market cannibalization (a drop in sales and demand for a product when the company introduces a new one)

58
Q

new markets & existing products

A

market development

59
Q

what is market development?

A

taking existing products in to new market segments (demographic or geographic)

60
Q

approaches to market
development:

A

-use penetration pricing to enter a new market
-use new distribution channels (eg: retail, e-commerce, intl agent)
-heavy promotion targeting new customers
-strategic alliance of a business operating in the market already

61
Q

benefits of market development:

A

-potential for considerable growth
-no need for expensive product development
-a logical strategy if existing markets are saturated or in decline

62
Q

drawbacks of market development:

A

-the business has limited understanding of new customer needs
-the business will be competing with established businesses
-often more risky than product development (especially intl markets)
-existing products may not suit new markets (localisation encouraged)

63
Q

new products & new markets

A

diversification

64
Q

what is diversification?

A

a business offers new products to new customers in a new market

65
Q

possible approaches of diversification:

A

-innovation and r&d
-acquire an existing business in the market

66
Q

benefits of diversification:

A

-spreads business risk by engaging in different markets
-business can use some of its core competencies and apply them to a new market

67
Q

drawbacks of diversification:

A

-no recognition or expertise in the market
-extremely high risk strategy

68
Q

what is the aim of product portfolio?

A

to categorise a company’s products with specific characteristics in order to make strategic decisions about them

69
Q

example of portfolio planning models:

A

-the product life cycle
-the boston matrix

70
Q

simple evaluations of portfolio analysis models:

A

-they are useful to help apply strategic decision making to a range of products
-the sometimes oversimplify complex realities

71
Q

what is the aim of a business?
(strategic positioning)

A

to strategically position itself differently from its competition

72
Q

what are porter’s strategies?

A

three positioning strategies a business should follow in order to compete within its market

73
Q

what did porter believe that a business must have to compete with rivals?

A

a distinguishable focus

74
Q

what are porter’s strategies based on?

A

the source of the competitive advantage and the scope within the market

75
Q

what 3 things did porter state that businesses compete on?

A

-on price
-on differentiation
-on a very specific customer (market segmentation)

76
Q

what are the different market scopes?
(porter’s strategic matrix)

A

broad & narrow

77
Q

what are the competencies?
(porters strategic matrix)

A

uniqueness & low cost

78
Q

which strategy should be chosen if the scope of the market is narrow?

A

market segmentation

79
Q

what is market segmentation?

A

it involves targeting a specific group of customers (niche) and not the whole market

80
Q

how can segmentation be achieved?

A

through either cost leadership or differentiation

81
Q

what is the basis of a segment?

A

-its unique needs
-geographic or demographic characteristics
-a specialist product or service

82
Q

benefits of market segmentation:

A

-it’s easier to target a narrow segment of the market as communications and marketing can be focused
-it’s possible to develop a better understanding of customer needs as the segment has narrower interests, needs and characteristics

83
Q

drawbacks of market segmentation:

A

-customer loyalty is vital if sales are to be maintained (every customer counts)
-the market may disappear (or no longer be a viable option) if it shrinks in size

84
Q

what is competitive advantage?

A

it exists where a business creates unique value for its customers that is greater than that offered by competitors

85
Q

which areas of practice can lead to a sustainable competitive advantage?

A

-innovation
-architecture
-reputation

86
Q

why can the last 3 areas of practice lead to a sustainable competitive advantage?

A

it is unique, not easily copied and may take a long time to achieve

87
Q

which strategy should be chosen if the market is broad and the competency is uniqueness?

A

differentiation

88
Q

what is differentiation?

A

when a business competes by offering a unique product or service to the market

89
Q

examples of bases for differentiation:

A

-quality
-customer service
-branding
-speed and efficiency
-aesthetics

90
Q

benefits of differentiation:

A

-it can make the business stand out
(competitive advantage)
-a differentiation helps develop a unique brand image
-differentiation adds value and therefore higher prices can be charged

91
Q

drawbacks of differentiation:

A

-other businesses may be able to copy the strategy if it is not sustainable or defensible
(e.g. a product is defensible if it is under copyright)

92
Q

which strategy should be chosen if the market is broad and the competency is low cost?

A

cost leadership strategy

93
Q

what is low cost strategy?

A

achieving an advantage by being the lowest cost operator in the market

94
Q

how do businesses usually become the lowest-cost operator?

A

the method usually involves production on a large scale, which enables the business to exploit economies of scale

95
Q

suitable markets for cost leadership strategy:

A

-standard products
-little product differentiation
-when branding is restively unimportant

96
Q

ways to achieve cost leadership strategy:

A

-operate at a scale that keeps average costs low (mass production)
-by using economies of scale
-have unique access to technology (patented technology)
-have unique access to skills or raw materials

97
Q

benefits of cost leadership strategy:

A

-can help to achieve high profit margins as cost per unit is kept low
-it can acquire market share

98
Q

drawbacks of cost leadership strategy:

A

few businesses can operate as the cost leader within a market as multiple businesses cannot directly compete on cost
(may lead to price wars)

99
Q

factors to consider when choosing a strategy:
(porters strategic matrix)

A

-the expected cost
-anticipated returns
-risk aversion
-core competencies
-external environment
-stakeholders

100
Q

factors affecting strategy:
the expected cost

A

product development and diversification are likely to be considerably more expensive than the other strategies

101
Q

factors affecting strategy:
anticipated returns

A

a business will conduct investment appraisal in order to consider the potential reward of the strategy

102
Q

what is risk aversion?

A

the willingness of the owners/ managers to take risks

103
Q

factors affecting strategy:
core competencies

A

a business will look to choose a strategy that makes use of the strengths and advantages possessed by the business

104
Q

factors affecting strategy:
stakeholders

A

apart from financial returns, a business will consider the impact of its strategy on its stakeholders

105
Q

what is a strategy?

A

-a long-term approach that a business will take to achieve its objectives
-they involve a major commitment to resources

106
Q

what do strategies guide?

A

tactics

107
Q

what are tactics?

A

-the day-to-day decisions taken by middle managers
-they are frequent and involve fewer resources
-they are taken to achieve the strategic direction of the business

A LEVEL BUSINESS - TH (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions