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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

Influences on the mission of a business

A

Size of the business
Nature of owners and other important stakeholders
Changes over time
Business performance
External factors
Social responsibility

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2
Q

Internal and external influences on corporate objectives and decisions

A

Pressures for short termism
Business ownership
External and internal environment

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3
Q

Strategy

A

Medium to long term plan to achieve objectives

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4
Q

Tactics

A

How strategy is carried out

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5
Q

Corporate aims

A

Long term targets and plans to fulfill mission statement

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6
Q

Corporate objectives

A

Medium to long term quantifiable targets to fulfill mission statement

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7
Q

Corporate strategy

A

Actions taken by the business to achieve objectives

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8
Q

Business tactics

A

Actions taken on day to day business to support strategy

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9
Q

Strategic decision making

A

Strategic decision making concerns general direction and overall policy of an organisation

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10
Q

Functional decision making

A

Short to medium term and concerned with specific functional area rather than overall policy

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11
Q

Value of SWOT analysis

A

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

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12
Q

Balance sheet

A

Financial document that summarises net worth of business at given point in time

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13
Q

Income statement

A

Financial document that summarises firm’s trading activities and expenses to show whether firm has made profit or loss over specific period

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14
Q

Balance sheet contents

A

Assets
Liabilities
Net current assets
Net assets
Share capital and reserves
Trade credit
Working capital
Liquidity

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15
Q

Depreciation

A

Allows value of fixed asset to be spread over its useful life

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16
Q

Ratio analysis

A

Compares one piece of information with another
Ratios are more meaningful if you have at least two years to compare, so that you can identify a trend

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17
Q

Ratio analysis equations

A

Profitability
Liquidity
Gearing
Efficiency

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18
Q

Published accounts

A

Good source of finance, they allow a structure for comparisons over time and with other firms can be an aid to decision making

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19
Q

Core competencies

A

Fundamental areas that firm is good at and separates it from another firm
Leads to competitive advantage

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20
Q

Assessing short and long term performance

A

Decisions made in short term may allow firm to improve performance in long term but have negative impact in short term

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21
Q

Elkington’s triple bottom line

A

Model designed to encourage sustainability

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22
Q

Elkington’s triple bottom line key components

A

Profit
People
Planet

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23
Q

Kaplan and norton’s balanced scorecard

A

Strategic system used to plan and manage firm’s activities to its vision statement

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24
Q

Kaplan and norton’s balanced scorecard key areas

A

Finance - measures financial capability
Learning and growth - HR requirements
Customer - expectations being met

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25
Q

Political environment

A

Government actions that impact on strategic and functional decisions made by a firm
Can be local, national or international authorities

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26
Q

Legislation

A

Creating and enacting laws in order to protect individuals, firms and society

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27
Q

Competition law

A

Promotes fair competition in markets and stops abuse of consumers by firms due to monopoly power

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28
Q

Competition policy

A

Seeks to improve competitive nature of markets
Protects interests of consumers and society

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29
Q

Competition policy impacts

A

Innovation
Lower prices
Improved quality

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30
Q

Labour market law

A

Protect worker from discrimination within workplace

31
Q

Equal pay act

A

Both sexes should be treated equally at work

32
Q

Sex discrimination act

A

Outlaws discrimination based on gender for recruitment, promotion, training and dismissal

33
Q

Race relations act

A

Illegal to discriminate based on colour

34
Q

Disability discrimination act

A

Illegal to discriminate against disabled people

35
Q

National minimum wage

A

Minimum hourly wage rate introduced

36
Q

Wage discrimination

A

Business pay workers different wage rate for same job

37
Q

Labour market reforms

A

Impact on trade unions with reduction in trade union power and influence

38
Q

Environmental law

A

Influence behaviour of individuals and businesses in order to reduce negative impacts on natural environment

39
Q

SMEs

A

Small and medium size enterprises

40
Q

Regulation

A

Undertaken by government to create competitive markets

41
Q

De-regulation

A

Opening up of markets to new competition through removal of rules and regulations that created barriers to entry

42
Q

Infrastructure

A

Governments will look to improve infrastructure to help firms operate more effectively

43
Q

The environment

A

UK and EU governments use environment policy to control levels of pollution, waste management and climate change

44
Q

International trade

A

International trade is exchange of goods and services between countries

45
Q

Taxation

A

Process of imposing changes on business and individuals by government

46
Q

Direct taxes

A

Taxes imposed on individual or property e.g. income tax, national insurance

47
Q

Exchange rates

A

SPICED - Strong pound - Imports cheaper - Exports dearer
WPIDEC - Weak pound - Imports deader - Exports cheaper

48
Q

Inflation

A

General rise in prices or fall in value of money

49
Q

RPI

A

Retail Price Index - measure of ‘basket’ of goods and services representative of what people buy in UK

50
Q

CPI

A

Consumer Price Index - similar to RPI but mainly excluding housing costs

51
Q

Fiscal policy

A

Manipulation of government, spending, taxation and government borrowing to influence level of economic activity

52
Q

Fiscal policy aims

A

Keep inflation on 2%
Maintain stable economic cycle
Stimulate economic growth and employment during times of recession

53
Q

Monetary policy

A

Manipulation of rate of interest, money supply and exchange rates to influence level of economic activity
Main target is to maintain low rate of inflation

54
Q

Free trade

A

No restrictions on flow of goods and services between countries

55
Q

Protectionism

A

Policies imposed by governments to restrict free movement of goods and services between countries

56
Q

Globalisation

A

Integration of international economies leading to world market in goods and services

57
Q

Globalisation Adv vs Disadv

A

Adv:
Cheaper labour costs abroad
Cheaper raw materials from low cost countries
Opportunities to sell in new markets

Disadv:
Communication and transport problems
Increased competition
Can gain bad rep for making UK workers redundant

58
Q

Characteristics of globalisation

A

Increased investment flows
Increased migration

59
Q

Emerging economies

A

Emerging market is a country with low to middle average income per person

60
Q

Urbanisation

A

General movement of people towards cities and away from rural areas

61
Q

Migration

A

Movement of people between countries

62
Q

Changes in consumer lifestyle and buying behaviour

A

Technology
Viral marketing
Social media
Emotional branding
Health care

63
Q

CSR (Corporate social responsibility)

A

Continuous commitment by firm to behave ethically and contribute to economic developments

64
Q

Carroll’s corporate social responsibility

A

Highlights 4 aspects of corporate social responsibility, society experts firms

65
Q

Carroll’s corporate Social Responsibility Pyramid

A

Economic responsibilities
Legal responsibilities
Ethical responsibilities
Philanthropic responsibilities

66
Q

Technological change

A

Ongoing development of invention, innovation and sharing of technology or processes

67
Q

Porter’s five forces

A

Buyer power
Supplier power
Substitute threat
Entry threat
Rivalry

68
Q

Entry threat (barriers to entry)

A

Any factor that stops a firm from entering a market

69
Q

Buying power

A

Large firms are in a dominant position when buying from suppliers

70
Q

Supplier power

A

Suppliers extremely powerful in marketplace as they supply the products they have exclusive access to

71
Q

Rivalry

A

Monopoly - one firm dominates market
Duopoly - two firms dominate market
Oligopoly - small number of firms are in industry
Monopolistic - many firms compete in industry selling differentiated products
Perfect competition - many firms in industry with no influence on market price

72
Q

Substitute threats

A

When firm within industry faced with threat of similar product from another industry

73
Q

How 5 forces shape competitive strategy

A

5 forces look at impact of each force on profit of industry and how this is shared out between firms

Business (8 decks)

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