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A Level Business (AQA) > 3.7 - Analysing the Strategic Position of a Business > Flashcards

3.7 - Analysing the Strategic Position of a Business Flashcards

1
Q

What is a mission statement?

A
  • A statement of the organisations purpose - what it wants to achieve in the larger environment
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2
Q

What are some internal influences on objectives?

A
  • Finance
  • Resources available
  • nature of product
  • HR
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3
Q

What are the external influences on objectives?

A

competition, change in demand, economy, legislation, shareholder pressure

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4
Q

What are the impacts of strategic decision making on functional decision making?

A

decisions influence each functional area of the business, specifically marketing, HR, finance, operations

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5
Q

What are the value of SWOT analysis

A
  • identifies completion advantage and disadvantage
  • identifies weaknesses, allowing them to be redressed
  • reduces vast amounts of information a business into a manageable quantity
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6
Q

What are balance sheets?

A

accounting statements that provide a snapshot of a company’s financial position at a particular time

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7
Q

What are income statements?

A

A financial statement showing the revenue and expenses for a fiscal period.

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8
Q

What are the stages of an income statement?

A

gross profit
operating profit
profit before tax
profit after tax

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9
Q

What are profitability ratios?

A

Measures of the operating success of a company for a given period of time.

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10
Q

What are liquidity ratios?

A

Measures of the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash.

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11
Q

What is gearing?

A

A long-term liquidity ratio that measures the percentage of a firm’s capital employed that comes from long-term liabilities, such as debentures and mortgages. Firms that have at least 50% gearing are said to be highly geared.

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12
Q

What are efficiency ratios?

A

indicate how well a firm’s resources have been used, such as the amount of profit generated from the available capital used in the business.

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13
Q

What is the formula for ROCE?

A

Operating profit / capital employed x 100

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14
Q

What is the formula for current ratio?

A

Current liabilities / current assets

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15
Q

What is the formula for gearing?

A

Non-current liabilities / total equity + non-current liabilities x 100

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16
Q

What is the formula for inventory turnover?

A

Cost of sales / inventories

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17
Q

What is the formula for receivable days?

A

Receivables / sales revenue x 365

18
Q

What is the formula for payable days?

A

Payables / cost of sales x 365

19
Q

What is the limitations of financial ratios?

A

-not useful in isolation
-hard for companies operating in multiple industries
-must be analyzed relative to one another
-determining a range of “acceptable” values can be difficult

20
Q

What are the marketing measures of performance?

A
  • Brand image
  • Customer service
  • Effectiveness of marketing campaign
  • New product sales as a percentage of all product sales
21
Q

What are the HR measures of performance?

A
  • Labour turnover and retention
  • Labour productivity
  • Employee costs as percentage of turnover
  • Labour cost per unit
22
Q

What are the operations measures of performance?

A
  • Capacity utilisation
  • Quality
  • Productivity
  • Speed of response and flexibility
23
Q

What are core competences?

A

Unique abilities a business possesses in order to gain a competitive advantage

24
Q

Short term approach for business success?

A
  • Insufficient spending on research and development
  • Greater emphasis on providing shareholders with high dividends rather than retaining profits
  • External growth rather than organic growth
25
Q

Long term approach retains profit for investment in business success

A
  • Research and development
  • Staff training
  • New machinery and technology
26
Q

What is Elkington’s Triple Bottom Line?

A

Highlights that businesses may have different objectives, not just for profit. People, planet, profit

27
Q

What is competition?

A

law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies

28
Q

What is employment law?

A
  • Pay
  • Working conditions
  • Equal opportunities
  • Trade union representation rights
29
Q

What is government policy?

A

The central ideas or principles that guide government in its work, including the kind of laws it passes.

30
Q

What is Gross Domestic Product (GDP)?

A

A measurement of the total goods and services produced within a country.

31
Q

What is fiscal policy?

A

Government policy that attempts to manage the economy by controlling taxing and spending

32
Q

What is monetary policy?

A

Government policy that attempts to manage the economy by controlling the money supply and thus interest rates.

33
Q

What are the different forms of taxation?

A
  • Income
  • National insurance
  • Value added tax (VAT)
  • Excise duties
  • Corporation tax
34
Q

What are exchange rates?

A

a measurement of the value of one nation’s currency relative to the currency of other nations

35
Q

What are the impacts of changing exchange rates

A

A high exchange rate means that the pound is worth more against other currencies. this means that UK goods are more expensive for foreign customers. a strong pound benefits UK firms that import foreign goods because they are now cheaper.

A low exchange rate has the opposite effect because the pound is worth less against foreign currencies. this results in UK exports being cheaper but imports being more expensive.

36
Q

What is inflation?

A

a general increase in prices and fall in the purchasing value of money.

37
Q

What is protectionism?

A

the theory or practice of shielding a country’s domestic industries from foreign competition by taxing imports.

38
Q

What is open trade?

A

An economic policy of not discriminating against imports from and exports to other countries

39
Q

What isn globalisation?

A

the process by which businesses or other organisations develop international influence or start operating on an international scale.

40
Q

What is the importance for globalisation for businesses?

A
  • comparative advantage
  • increased competition
  • migration
  • global economic cycles
41
Q

What are emerging economies?

A

Developing countries that over the past two or three decades have begun to develop a strong industrial base, such as Singapore and Hong Kong.

A Level Business (AQA) (10 decks)

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