Business Objectives

Question 1

Mission statements

Answer 1

Tells the purpose of the business and can include information such as values, its standards and how will it achieve the mission

Question 2

Business Objectives

Answer 2

They set objectives to enable them to achieve their mission. Objectives turn corporate aims into specific goals that must be met.

Question 3

Corporate objectives

Answer 3

are goals of a business as a whole
depend on the size of the business

Question 4

Departmental objectives

Answer 4

they are specific to each department

Question 5

Objectives should be:

Answer 5

Smart - make them specific to what you are doing
Measurable - if not measurable then business wont know if its achieved or not
Agreed - everyone needs to know what to agree on
Realistic - no point setting something that no one can make or do
Time bound - should be a specific time frame that the objectives should be done for

Question 6

Strategy

Answer 6

is a long-term plan of action developed to achieve a businesses objective

Question 7

4 different sections of Ansoff Matrix these include:

Answer 7

Market penetration - trying to increase your market share in your existing market
New product penetration - selling new products in existing market
Market development - is selling existing products to new markets. can be done through repositioning meaning business focuses on different segments of the market
Diversification - selling new products to new markets. Risky strategy as it involves moving into markets that the business may have no experience of

Question 8

SWOT Analysis

Answer 8

Considers the businesses individual circumstances and done in a factual and objective way

Question 9

4 Components of SWOT

Answer 9

Strength
Weaknesses
Opportunities
Threats
An advantage of these are that it can easily be redone to take into account changing conditions
also lets the business know where it has a competitive advantage over its rivals

Question 10

Porters 5 forces

Answer 10

Barriers to entry
- New entrants to the market will want to compete by selling similar products
- high start up costs

Buyer power
- Buyers have more power when there are few buyer and many sellers and when products are standardised = means easier for firms to charge a premium price

Supply power
- have more power when there are few suppliers and lots of customers buying from them
- businesses can try to tie buyers into long-term contracts to make it harder to switch suppliers

Threats of substitutes
- the willingness of customers substitutes is a factor affecting competitiveness
- relative price and quantity are important
- businesses can make it expensive or difficult for customers to switch to a substitute

Rivalry
- intense in the market with lots of equal-sized competitors
- industries with high fixed costs are very competitive
- rivalry is intense in young industries where competitors are following growth strategies

Question 11

PESTLE and Porters 5 forces

Answer 11

can be used to examine the external factors acting on a business