BST Flashcards
(142 cards)
What is a mission statement?
- An organisation’s mission is ‘the most generalised type of objective
- written communication of mission to internal and external stakeholders.
- usually a brief statement set out in general terms which doesn’t include a timescale or commercial terms.
What are the four features of an effective mission statement?
PURPOSE - Why does the organisation exist and what does it aim to achieve for its stakeholders?
STRATEGY - What resources, competencies or generic strategy give the company a competitive advantage?
POLICIES - What standards and behavioural patterns are adopted within the organisation?
VALUES - What beliefs do the managers and employees share?
Advantages for mission statements
- Help resolve stakeholder conflict
- Set the direction of the organisation and so help formulate strategy.
- Help communicate the values and direction of the organisation to stakeholders.
Criticisms of mission statements
- Often full of meaningless terms like ‘the best’, which give staff little idea of what to aim at.
- Often ignored by managers.
- Often considered to just be a public relations exercise.
What is Mendelow’s Matrix used for?
Used to identify different stakeholders power interests and identify an appropriate response
What are the two axes of the matrix?
Level of interest and power of stakeholder
What to do with stakeholder with low interest and low power?
Minimal effort, can be directed
What to do with stakeholder with high interest and low power?
Keep informed
What to do with stakeholder with high interest and high power?
Key players, need participation
What to do with stakeholder with low interest and high power?
Keep satisfied
How should a stakeholder question be laid out?
- each stakeholder has a sub heading
- outline the interest of the stakeholder, clearly explaining what they are interested in
- outline the power of the stakeholder, clearly explain how the exercise this power
- recommend a response according to Mendelow’s Matrix
- include practical advice about executing the response
What is Porter’s diamond?
Can be used to explain why some nations have a competitive advantage in certain industries
What are the 4 determinants of national competitive advantage (Porters Diamond)?
- Demand conditions
- Related and supporting industry
- Factor conditions
- Strategy, structure and rivalry
Explain demand conditions
- demanding local consumers force firms to become more innovative
- Trend setting local consumers help local producers to anticipate future global trends.
- e.g. German drivers demanded powerful cars from German car manufacturers
Explain related and supporting industries
Proximity of related and supporting industries leads to:
- Easy access to components, with reduced lead times and carriage costs.
- Encourages knowledge sharing which increases innovation.
- e.g. The finance sector in the UK is aided by large accountancy and legal firms
Explain factor conditions
- The availability of the factors or production (the resources needed to operate).
- These include human resources, physical resources, knowledge, capital, infrastructure.
- e.g. French wine industry benefits from being able to grow good quality grapes
Explain strategy, structure and rivalry
Two key possible advantages:
- Strong domestic rivalry forces local firms to become more efficient to survive.
- The strategies or structures that have become prevalent in a particular nation may give advantages in particular industries.
- e.g. flat, decentralised organisation structures are popular in Japan and are believed to encourage innovation
What is Porter’s Five Forces used for?
Used to assess the attractiveness of an industry in terms of long run profitability.
What are the Porters five forces?
- Threat of new entrants
- Bargaining power of suppliers
- Threat of substitutes
- Bargaining power of customers
- Competitive rivalry
What makes a market attractive to new entrants?
- High industry growth
- High profit margins
- Few existing competitors
- Easy customer switching
What are barriers to entry of a market for new entrants?
Economies of scale Brand loyalty Capital requirements Access to distribution Patents Government subsidies
What is competitive rivalry?
How intense the competition is between existing companies in the market
What makes competitive rivalry higher?
large numbers of existing competitors high levels of fixed costs low industry growth low switching costs high exit barriers high strategic importance
What is the threat of substitutes?
Availability:
From different industries (e.g. rail travel vs bus travel)
From sub-industries (e.g. CDs vs MP3 downloads)
Increased likelihood:
Price of substitute is low
Relative performance of the substitute is comparable
Customers can switch easily