Business Objectives And Strategy Flashcards
Distinguish between quantifiable and unquantifiable risk
Quantifiable risks are those that can be measured, while non-quantifiable risks are those that are not tangible
Explain the purpose of a business plan
to identify, describe and analyze a business opportunity and/or a business already under way, examining its technical, economic and financial feasibility.
What are the main points of a business plan
.Executive summery
.marketing plan
.management strategy
Advantages and disadvantages of having a business plan
Advantages- increased clarity over direction,supports funding
Disadvantages-maybe too inaccurate, creates false certainty
Explain the ‘Plan-Do-Review’
The cycle of coming up with a plan through to the step of reviewing how it went, the 4 stages or plan,do,review,assess
How can the plan-do-review cycle improve a business’ performance?
Helps go through the stages of how effective the plan for performance change will be in order to evaluate the if it will be a success or not
Importance of strategic review to the business
an important tool for assessing how well your business has performed, relative to its goals
What is meant by risk and reward
The risk/reward ratio marks the prospective reward an investor can earn for every dollar they risk on an investment
How could a business reduce its risk
Prioritise, reduce liabilities, insurance
What is meant by uncertainty
any event that a business is unable to predict or directly influence which may lead to negative outcomes as a result.
Internal and external courses of uncertainty
Internal-new objectives, loosing employees, industrial action
External-entering a new market, economic recession
How can uncertainty effect the aims and objectives of the business
Uncertainty could push businesses to cut back on production, investment and employee compensation
Advantages and disadvantages of contingency planning
Advantages-it allows managers to be flexible,
Disadvantages- time and cost consuming, may not happen
Importance of contingency planning
help to ensure that you’ve always got a backup option when things go wrong, or when the unexpected happens.
What is seasonal and cyclical variations impact on forecasting
Seasonal- changes due to seasonal factors
Cyclical- changes due to economic factors
The impact and importance of effective decision making to the business
Decisions allow leaders to respond to changing market conditions, threats, and opportunities, in order to secure the future success of their organisation.
How does the level of risk affect decision making
Usually the larger the business and the importance of the nature of the business, the more sophisticated the level of risk management is needed
How does the nature of risk affect decision making
The bigger the damage potentially caused by the risk the more care need to go into the decision making
How does the accuracy of forecasts affect decision making
Accurate forecasting gives the business the ability to make well informed decisions to create accurate data driven strategies
Distinguish between strategic, tactical and operational decisions
Strategic-complex, made by senior managers
Tactical-less complex,made by middle managers
Operational-small and routine, made by junior managers
Overall usefulness of Ansoffs matrix
Useful for providing strategic growth route to discuss with stakeholders, however doesn’t outline the risk involved
