7.1 mission, corporate objectives and strategy

Question 1

What is a mission statement

Answer 1

Sets out the purpose of an organisation and thus its reason for existing. Current position.

• what the business wants to be
• the values of the business
• the range of the firms activities
• the importance of different groups, Eg employees or customers

Question 2

What is a vision statement

Answer 2

Sets out what a business wants to be in the future, tends to be longer term.

Question 3

Order of setting out objectives and knowing that they have been achieved

Answer 3

Mission statement (what does the business do) -> vision statement (what the business aims to be) -> strategy (how the business will get there) -> corporate objectives (how the business knows it’s achieved it’s goals)

Question 4

5 influences on business missions

Answer 4

Values of founders of the business, values of employees, industry of the business, society views, ownership of the business

Question 5

What is a corporate objective and give examples

Answer 5

Turn the mission statement into something more quantifiable, very general
Market position, innovation, financial resources, physical resources, human resources, productivity, social responsibility, profits

Question 6

What is short-termism

Answer 6

Excessive focus in short term objectives and results

Question 7

Difference between strategy and tactics

Answer 7

Strategy is long term whereas tactics are short term

Tactics involve fewer recourses and less uncertainty

Question 8

What is SWOT analysis

Answer 8

a method of strategic analysis which considers the internal and external environments of a business.
Strengths
Weaknesses
Opportunities
Threats

Question 9

Benefits of SWOT analysis

Answer 9

• low cost and straightforward, viable in most businesses
• assist managers in a structured way, focus on both internal operations and external environments of the business
• encourages management to develop plans on both current state and also prompting a forward-looking approach
• helps managers recognise ‘threats’ and asses risk
• SWOT analysis can be combined with other business strategies to help develop a business’s strategy
• SWOT analysis can be used within the functions of a business, such as developing a marketing strategy

Question 10

limitations of SWOT analysis

Answer 10

• SWOT analysis only covers issues that can be classified as part of SWOT, can be hard to identify uncertainties of two-sided factors
• benefits of SWOT analysis will depend on the quality of interpretation, if this is poor ,then the analysis is likely to be of little value
• analysis offers no assistance to managers in judging the relative importance of SWOT
• SWOT data can be subjective depending on opinions, whereas it should be comparable data
• SWOT analysis is only as good as the data it is based on