Business Objectives And Strategy Flashcards

1
Q

Business plan includes

A

businesses objectives, strategies and financial forecast

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2
Q

Benefits business plan

A

Provides sense of direction

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3
Q

Drawbacks of business plan

A

Risky
Useless unless followed
Time management

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4
Q

Contingency plan

A

Outcome other than it’s usual plan often used for risk management

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5
Q

Porters 5 forces

A

Rivalry
Power of buyers
Threats of new entrants
Threat of substitutes
Power of suppliers

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6
Q

Forecasting

A

Use of existing data to predict future e.g trends, costs, sales

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7
Q

Ansoff matrix

A

Market penetration - aims to sell existing products in existing markets
Product development - introduce new products in existing markets
Market development -seeks to sell existing products into new markets
Diversification - new products into new markets

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8
Q

SMART Objectives

A

Specific, measurable, agreed, realistic, timeframe

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9
Q

Mission Statement

A

set out the overall purpose of the business and its vision

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10
Q

Corporate social responsibility

A

acting ethically with stakeholders

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11
Q

Plan do Review cycle

A

planning for a decision, implementing, reviewing and assessing the successfulness of the decision

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12
Q

Risk

A

negative outcome that can be predicted

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13
Q

Quantifiable risk

A

can measure it, see it coming

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14
Q

Unquantifiable risk

A

not able to be measured

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15
Q

Opportunity cost

A

value of next best alternative to do something else

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16
Q

Crisis management

A

actions business takes to overcome a disaster

17
Q

Porters generic strategies

A

Cost leadership - business can reduce costs to increase profit margins or lower prices
Differentiation - having a USP
Focus - operating in niche market

18
Q

Gearing

A

percentage of businesses capital that comes from borrowing

19
Q

Cash flow

A

money flowing in and out of business

20
Q

3 types of budgeting

A

income, expenditure, profit

21
Q

Income budget

A

prediction of revenue

22
Q

Expenditure budget

A

prediction of spending

23
Q

Profit budget

A

prediction of profit

24
Q

Variance analysis

A

explaining why budgeted figures are different to actual figures

25
Liquidity
position of business tells us how able it is to pay bills, if business has more cash available, then better liquidity position
26
Profitability
tells how much profit business makes in comparison to revenue
27
Market share
percentage of the sales revenue in a whole market that one business is responsible for
28
Resource utilisation
how much business resources they are using
29
Difference between profit and cash?
profit = revenue- costs cash = how much money business has right now
30
Strategy
long term decision making
31
Tactics
short term decision making
32
Operational decisions
day to day decision making
33
Seasonal variation
caused by changes in demand in different seasons
34
Cyclical variation
variation over several years
35
Decision making process
risk uncertainty opportunity cost rewards