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

- lacks focus - quickly out of date - independent?

7. Analysing Strategic position Flashcards by Sasha Walby

what is a mission statement?

overall purpose and future vision of the business

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what is an effective mission statement?

differentiates
clear
motivates
for all stakeholders

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criticisms of mission statement?

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

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what is the difference between strategy and tactics?

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

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examples of strategy v Tactics: Netflix

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

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examples of strategy v tactics: Starbucks

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

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what does SWOT stand for?

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

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advantages of SWOT

analyses external environ
logical structure
focus on strategic issues

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disadvantage of SWOT

lacks focus
quickly out of date
independent?

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what is the purpose of ROCE?

measure performance
provides target
benchmark against competitors

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ROCE calc.

operating profit/ total equity + non current liabilities x100

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Current ratio

Current assets/ current liabilities

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evaluating current ratio

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

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gearing ratio meaning

proportion of finance provided by debt

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What does GDP measure?

measures all economic activity i a country

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Inflation

substantial increase in the average price levels of economy

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how does inflation benefit business

prices rise
higher profit margins
debt as source of finance cheaper

how does inflation damage a business

rising costs
lower investment
higher interest rates

fiscal monetary policy

use of government taxation and spending

monetary policy

use of interest rates and changes to money supply

what is protectionism

restrict free trade

methods of protectionism

tarriffs
-quotas
-barriers (regulate quality)
subsidies (aid domestic)

exchange rates

price of one currency in the terms of another

impact of exchange rates

price of exports
cost of goods bought oversea
revenue/profit earned oversea

types of fiscal (taxes)

- income tax - corporation tax - VAT

business cycle stages

- boom -recession - slump - recovery

what are core competencies?

-something unique that a business can/has done strategically well

features of competencies

- provide consumer benefits - hard for comp. to imitate - leverage to wider market

4 core competencies

- collective learning - integration of skills - deliver superior products - differentiation to comp.

short termism + example (related)

focus and prioritise short term over long term goals eg. unileaver adopting long term perspective

indicators of short termism

- low R+D investment - high dividends (not reinvest) - external growth - bonuses on short obj

elkingtons triple bottom line

performance of - people -planet -profit

benefits of ETBL

- think beyond profit measure - encoruages CSR reporting - supports environ

drawbacks of ETBL

- not useful for overall performance - hard to measure planet/people - no legal requirement to report

Reasons for greater globalisation

- trade liberation (less barriers) - political change - less communication cost - increased sig of MNC's - migration

Methods of entering international markets

- Exporting: low risk - Liscensing: local presence, risky but valuable insight - Alliance: shared profit/risk, exploit customer bases - Direct Investment: high cost/risk

developed v emerging economies

- saturated/growing market - BRICs emerging - MINT predicted growth

example of internationalisation

- Ikea to India - adapted services to having installers rather than do it yourself - low prices (price sensitive) - adapted menu

problems of globalisation

- longer lead times - implications of CSR - additional management costs - impact of exchange rates - communication (language/time zones)

reasons for offshoring

- manu costs lower - potential for better skilled workers - more capacity - take adv. of free trade

example of offshoring

UK financial call service centre in India eg. HSBC

reasons for reshoring

- certainty of delivery times - less risk/ complex of supply chain - more certain of quality - easier collab w. home suppliers - cost adv. is not as significant anymore