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Business > 7. Analysing the strategic position of a business > Flashcards

7. Analysing the strategic position of a business Flashcards

1
Q

what is a strategy

A

a medium term plan to achieve an objective

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2
Q

what is a tactic

A

a short-term action to support a strategy

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3
Q

what is the objective of competition law

A

to promote economic efficiency through the sound development of the market economy and to protect the consumer from excessive market power

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4
Q

what is the CMA

A

the competition and markets authority

a non-ministerial government department responsible for strengthening business competition and preventing and reducing anti-competitive activities

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5
Q

what is the labour market legislation

A

designed to prevent the exploitation of employees by business by regulating the relations between workers, employees and trade unions

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6
Q

eg of labour market legislation

A 
the equality act 2010
the minimum wage act 1998
the employments rights act 
the health and saftey at work act
the working time regulations 1998
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7
Q

eg of competition legislation

A

the competition act 1998

the enterprise act 2002

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8
Q

what is enviroment legislation

A

designed to minimise the negative impact of business on the environment

two main categories: pollution and climate change

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9
Q

eg of environment legislation

A

the environmental protection act 1991

the environment act 1995

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10
Q

what is a mission statement

A

a qualitative statement of a business’ purpose

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11
Q

what are corporate objectives

A

quantitative goals set for the entire business

must be SMART
specific
measurable
acheiveable
relevant
time
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12
Q

internal factors influencing the choice of objectives

A
  • business size and age
  • ethics/social responsibility
  • business performance
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13
Q

external factors influencing choice of objectives

A
  • shareholders pressure
  • changes in the economy
  • changes in government polivy
  • competitors’ actions
  • social changes
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14
Q

pros of financial ratios when assessing perfomance

A
  • can help identify a trend when comparing with pervious years
  • can help compare performance with similar businesses
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15
Q

cons of financial ratios when assessing performance

A
  • can the figures be trusted? window dressing could distort figures
  • looking at past data
  • ignores other key data: changes in the economy, strategic decisions etc
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16
Q

what does profitability refer to

A

the capacity of a business to make profit and profitability ratios assess its ability to generate profit

17
Q

what is does liquidity refer to

A

the extent to which a business is able to pay its short-term debts

18
Q

what does gearing refer to

A

investigates whether or not a business is at risk from increases in interest rates and falling profit

19
Q

what is a core competence

A

something unique that a business has or can do better than competitors

20
Q

a core competency should: 3

A
  • be difficult for competitors to replicate
  • provide opportunities for a business to expand into new markets
  • provide significant benefits to customers
21
Q

what is outsourcing

A

subcontracting of non-core activities of an organisation in order to free up cash, time, personnel and facilities (concentrating on areas it has a competitive advantage)

22
Q

long-term achieved through: 3

A
  • investment in research and development of new products and processes
  • focusing on customer satisfaction and loyalty
  • focusing on employees engagement and loyalty
23
Q

what is Kaplan and Norton’s balanced scorecard model

A

a planning tool that helps a business achieve its corporate goals

24
Q

4 perspectives of the balanced scorecard

A

finance
customer
internal process
learning/growth

25
Q

pros of the balanced scorecard 2

A
  • provides a broader view that may detect weaknesses early
  • it allows employees to see their importance within an organisation, thereby acting as a motivator
  • helps achieve long-term objectives and strategy as opposed to short-termism
26
Q

weaknesses of balanced scorecard

A
  • it’s complex and some areas can be difficult to quantify
  • achieving the right balance between the dimensions can be difficult
  • its use is dependent on the complier’s perspective
27
Q

what is Elkington’s triple bottom line

A

concept emphasises the three Ps:
profit (economic)
people (social)
planet (environmental)

28
Q

benefits of the TBL

A
  • helps businesses consider its stakeholders and ethics
  • corporate social responsbility can bring benefits to the business
  • ensures the sustainability of the business
29
Q

drawbacks of the TBL

A
  • CSR can lead to higher costs, premium price and reduce competitiveness
  • may incompatible with an objective of cost minimisation
  • setting objectives for ‘people’ and ‘planet’ may be difficult

Business (14 decks)

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