business Flashcards
mission statement
formal values of the aims and values of an organisation-
eg tesco live well for less
limitations of business statement
- written by business so biased
- not all public know who they are so is unuself
corporate strategies
overall scope and direction of a business and way various operations work together
what did ansof do
create a table explaining what is risky and what is not so diversify is risky but product or service development is no
what is porters matrix
3 strategies for competitive advantage-
- cost leadership- making products at low cost
- differentiation
- focus
- establish clear direction for business
strength and weakness of porters matrix
not useful for dynmic markets
not useful in crisis
good as identifies whena business in trouble and establishes clear direction
boston matrix
cash cow– still have customer lifestyle
dog-decline
?-high growth but low share
star-high share and growth
SWOT
- strengths
- weakness
- opp
- threats
growth
whena business wants to expand, sales options to generate more revenue
reasons for growth-achieve economies of scale
huge impact on production-more production=more economies of scale-less costs
4 types of economies of scale
- financisl-attract moe investment
- marketing-specalist marketer to make sure goods sell and gain discounts on big suplies
- technical-large firms employ labour specialists and improve productibity
- managerial-attract high level managers to boost company
problem with expanding
diseconomies of scale
overtrading
internal communcation-less face to face comm as business grows meaning mistakes made
merger
legal deal to bring 2 businesses together under s director
take over
a legal deal where a larger business takes over a smaller one
reason for mergers and takeovers
reason for mergers and takeovers
attempt to ensure increased market share
access to new markets
improved distribution
improved suppliers
access to tech and higher knowledge
organic growth eg aldi
grow internally through business
inorganic growth
growth through external factors such as mergers and takeovers
methods of organic growth
- new product launches
- opening new stores
- forign markets
- expansion of workforce
ad and disad of organic growth
ad- avoids risk of merging
-cheaper than merging
disad- very risky-new staff and stores is risky
-new markets and countries is unknown teritiry
quantitative sales forcasting
uses data to make predictions of future sales
use quantative sales forecsting to
organise production
organise staff
organies suppliers
organise finances
investment appraisal
attempt to determine the value of capital expenditure projects to see if long term investments will work
investment appraisal influence 3 decision making strategies
- new premises
- new machinery
- research
decision tree
business can not do all options so do a decision tree to find probabilty of what is best option
