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business. > Business objectives and strategies > Flashcards

Business objectives and strategies Flashcards

1
Q

What is a mission statement?

A

A statement which declares the overall purpose of the business

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2
Q

What is meant by the aims of a business?

A

What the business is trying to achieve (long term)

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3
Q

What is meant by a business objective?

A

Short term, specific targets

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4
Q

Why is it important for a business to have a mission statement?

A
  • Gives the company direction
  • Communicates purpose to stakeholders
  • Could motivate staff
  • Help recruit and retain the best staff
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5
Q

What is a strategic objective?

A

Slightly longer term target

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6
Q

What is a tactical objective?

A

Very specific and short term

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7
Q

What are 5 examples of a business objective?

A
  • Maximise profits
  • Launch a new product (Growth)
  • Increase market share
  • Provide good customer service
  • Provide an environmentally sustainable business
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8
Q

What might stakeholders be in conflict about?

A
  • Prices
  • Wages/costs
  • Effect on environment
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9
Q

What is a social enterprise?

A

A business that is set up in order to help people. it may also be known as the 3rd sector

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10
Q

What does a social enterprise seek to do?

A

Provide a service that benefits society whilst running a successful and professional business

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11
Q

Why might a business choose to operate as a social enterprise?

A

Give back to the community and help those who aren’t as privileged

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12
Q

What are the 4 factors of production?

A
  • Land (Natural resources)
  • Labour
  • Capital (Technology)
  • Enterprise
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13
Q

What constraints might there be on objectives?

A
  • Lack of staff
  • Lack of finance
  • Not being able to get permission
  • Shortage of demand
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14
Q

What is a corporate social objective?

A

Being seen as a business that cares about the environment and the local community

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15
Q

Why might a business have CSO?

A

To appeal to a wider market, more customers will be attracted if it benefits the environment and more revenue and profits will be made

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16
Q

What are the problems with CSO?

A
  • More staff required
  • Expensive
  • Need new materials/technology
  • Costs time of business
  • Short term inefficiency (slows production)
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17
Q

What changing circumstances could affect a business and its objectives?

A
  • Economic change (revenue)
  • Legal issues (contracts)
  • Political issues (Brexit)
  • Social attitudes (Starbucks in Australia)
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18
Q

What is a business plan?

A

A document drawn up to state how a business intends to achieve its objectives

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19
Q

What might a business plan include?

A 
Business idea
Market research
Financial plan
Objectives
Target market
20
Q

Why do businesses need a plan?

A
  • Gives guidance and direction
  • Helps control costs
  • Easier for loan
  • Helps achieve aims and objectives
21
Q

What is risk?

A

When the business owner invests their own time and money into a business

22
Q

What is reward?

A

Reward is a positive consequence from the risk. E.g, good profits, paying yourself a big salary and the lifestyle that comes with this

23
Q

What is quantifiable risk?

A

It can be measured

24
Q

What is non quantifiable risk? Give an example

A

It cannot be measured (e.g, risk leads to loss of tension or peace)

25
Q

What is Porters 5 forces model?

A

A tool for analysing competition in a business. It examines 5 forces that determine the competitive intensity of an industry in terms of its profitability

26
Q

What are the 5 forces in the Porters model?

A
  1. Threat of new entrants
  2. Threat of substitutes
  3. Bargaining power of buyers
  4. Bargaining power of suppliers
  5. Degree of rivalry
27
Q

What are the limitations of Porters 5 forces model?

A
  • Too simplistic
  • Disregards collusion
  • Only useful on an industry basis rather than individual companies
  • Markets can change, it is frozen in time
28
Q

What is meant by opportunity cost?

A

Giving up other potential options

29
Q

What is meant by a contingency plan?

A

A plan devised as a backup incase something goes wrong

30
Q

What are the 4 elements that make up the process of contingency planning?

A
  1. Identifying what and how things might go wrong
  2. Understanding the potential effects if things did go wrong
  3. Devising a plan to cope with these threats
  4. Putting strategies in place to deal with the risks before they happen
31
Q

What is meant by forecasting?

A

Using existing data to predict future trends

32
Q

What are some examples of qualitative forecasting?

A
  • Delph technique (expert opinion)
  • Brainstorming
  • Consumer opinion
  • Leading academic opinion (Uni professors)
  • Frontline staff opinion (Sales staff)
33
Q

What is an advantage of qualitative forecasting (opinions)?

A

Expert/advanced opinions are likely to be credible and reliable because they have lots of knowledge in the subject

34
Q

What is a disadvantage of qualitative forecasting?

A

It is based on opinion rather than fact so there is a degree of uncertainty

35
Q

What is an example of quantitative forecasting?

A

Time Series Analysis

36
Q

What does a time series analysis do?

A

Calculate averages over a period of time

37
Q

What can be gathered from a time series analysis?

A

Raw Data - looks at trends over time
Cyclical Variations - looks at economic patterns
Seasonal Variations - considers seasonal patterns
Random Fluctuations - looks at. unexpected changes in trends

38
Q

What are 2 benefits of using forecasts in a business?

A
  • It is only as reliable as the data put forward

- It enables you to see trends and patterns

39
Q

What are 3 limitations of using forecasts in a business?

A
  • Can’t assume trends will continue
  • Only recent information is relevant
  • Doesn’t consider internal changes for the business (discontinued product)
40
Q

What is a decision tree?

A

A mathematical model used to help managers make decisions

41
Q

What does a decision tree do?

A

Uses estimates and probabilities to calculate likely outcomes. It also helps decide whether the net gin from a decision is worthwhile for its risk

42
Q

What are 3 benefits of using decision trees?

A
  • Options can be compared
  • Risk can be addressed
  • Easy to produce and understand
43
Q

What are 3 drawbacks of using decision trees?

A
  • Only estimates
  • Ignorant of qualitative data
  • Doesn’t reduce amount of actual risk
44
Q

What is meant by crisis management?

A

The response made by a business in the event of a major crisis

45
Q

What is the SWOT decision making tool?

A

Strengths
Weaknesses
Opportunities
Threats

business. (11 decks)

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