7. Analysing Strategic position

Question 1

what is a mission statement?

Answer 1

overall purpose and future vision of the business

Question 2

what is an effective mission statement?

Answer 2

• differentiates
• clear
• motivates
• for all stakeholders

Question 3

criticisms of mission statement?

Answer 3

• vague
• viewed cynically
• not aligned with actions
• pr , marketing value only

Question 4

what is the difference between strategy and tactics?

Answer 4

strategy- long term to achieve corp. obj. with resources
tactic= short term, influenced by functions with less resources used

Question 5

examples of strategy v Tactics: Netflix

Answer 5

s=launched in over 100 countries to become streaming leader
t= increased quota of europe programmes in response to demand of eu

Question 6

examples of strategy v tactics: Starbucks

Answer 6

s= launched 200 stores in 100 china cities to increase market leadership
t= social media campaign following price criticisms

Question 7

what does SWOT stand for?

Answer 7

Strengths- internal
Weaknesses- internal
Opportunities- external
Threats- external

Question 8

advantages of SWOT

Answer 8

• analyses external environ
• logical structure
• focus on strategic issues

Question 9

disadvantage of SWOT

Answer 9

• lacks focus
• quickly out of date
• independent?

Question 10

what is the purpose of ROCE?

Answer 10

• measure performance
• provides target
• benchmark against competitors

Question 11

ROCE calc.

Answer 11

operating profit/ total equity + non current liabilities x100

Question 12

Current ratio

Answer 12

Current assets/ current liabilities

Question 13

evaluating current ratio

Answer 13

effective= 1.5-2.5
- industry matters
- compare with comp.
- look at trends

Question 14

gearing ratio meaning

Answer 14

proportion of finance provided by debt