7. Mission And Corporate Flashcards
What is the mission of a business?
The overall purpose of a business influenced by owners’ goals, personal values, and market opportunities
The mission shapes the direction and focus of the business.
What are corporate objectives?
Goals set by the business as a whole to achieve its mission
These differ from functional objectives, which are set for individual departments.
List three types of objectives a business can set.
- Profit
- Growth
- Survival
What internal factors influence a business’s objectives?
- Ownership
- Short-termism
- Internal environment
How does ownership affect a business’s objectives?
The form of the business (for-profit or non-profit) influences its goals and decision-making freedom
For example, sole traders have more freedom compared to limited companies.
What is short-termism in the context of business objectives?
The tendency for shareholders to demand quick returns, leading to short-term profit objectives
What external factors can influence a business’s objectives?
- Political
- Legal
- Economic
- Social
- Technological
- Environmental
- Competition
What is a strategy in business?
A medium to long-term plan of action developed to achieve a business’s objectives
What is the relationship between strategy and corporate objectives?
A corporate strategy is based on achieving corporate objectives
What are tactics in business?
Short-term plans for implementing strategy, focused on day-to-day activities
What differentiates strategic decisions from functional decisions?
Strategic decisions are long-term, high-risk and determine the overall direction, while functional decisions are short-term, lower risk, and made within individual departments
What is a SWOT analysis?
A tool used to identify strengths, weaknesses, opportunities, and threats facing a business
Fill in the blank: The acronym SWOT stands for _______.
Strengths, Weaknesses, Opportunities, Threats
How can changes in the economy affect a business’s objectives?
They may shift focus from profit maximization to survival
What might consumer interest in environmental issues influence?
A business’s decision to set objectives to minimize pollution
Provide an example of how functional decisions support strategic decisions.
If a business’s objective is to increase sales by 5%, the strategic decision may be to expand production capacity, leading HR to recruit more staff
What does SWOT stand for?
Strengths, Weaknesses, Opportunities, Threats
What is a strategy?
A plan to achieve specific objectives
Name three internal factors that could influence a business’s objectives.
- Strengths
- Weaknesses
- Mission
Name three external factors that could influence a business’s objectives.
- Opportunities
- Threats
- Economic conditions
What is the purpose of SWOT analysis?
To plan strategies by assessing strengths, weaknesses, opportunities, and threats
Fill in the blank: SWOT analysis helps businesses to _______.
[plan strategies]
What is one advantage of SWOT analysis?
It can easily be redone to account for changing conditions
True or False: SWOT analysis is done in a subjective way.
False
List the strengths mentioned for the coffee shop.
- Good reputation
- Good location
- Good quality products
List the weaknesses mentioned for the coffee shop.
- Small premises
- Cannot compete on price with chain stores
What opportunity was identified for the coffee shop?
Selling cakes and drinks to take away could increase their market size
What threat was identified for the coffee shop?
Possibility of a new competitor with lower prices
How can a business adapt its strategy using SWOT analysis?
By focusing on changing strengths, weaknesses, opportunities, and threats
What should managers focus on when planning strategy according to SWOT analysis?
- Opportunities that build on strengths
- Converting weaknesses into strengths
- Managing threats
Fill in the blank: The sandwich shop’s strength is that it is the only place in town that sells _______.
[fresh-made sandwiches]
What is the weakness identified for the sandwich shop?
It is located down a back alleyway
What opportunity does the sandwich shop have?
A new call center with 100 employees is opening nearby
What threat does the sandwich shop face?
A local restaurant is introducing a low price lunch menu
