Business Objectives And Strategy

Question 1

Business plan includes

Answer 1

businesses objectives, strategies and financial forecast

Question 2

Benefits business plan

Answer 2

Provides sense of direction

Question 3

Drawbacks of business plan

Answer 3

Risky
Useless unless followed
Time management

Question 4

Contingency plan

Answer 4

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

Question 5

Porters 5 forces

Answer 5

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

Question 6

Forecasting

Answer 6

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

Question 7

Ansoff matrix

Answer 7

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

Question 8

SMART Objectives

Answer 8

Specific, measurable, agreed, realistic, timeframe

Question 9

Mission Statement

Answer 9

set out the overall purpose of the business and its vision

Question 10

Corporate social responsibility

Answer 10

acting ethically with stakeholders

Question 11

Plan do Review cycle

Answer 11

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

Question 12

Risk

Answer 12

negative outcome that can be predicted

Question 13

Quantifiable risk

Answer 13

can measure it, see it coming

Question 14

Unquantifiable risk

Answer 14

not able to be measured

Question 15

Opportunity cost

Answer 15

value of next best alternative to do something else

Question 16

Crisis management

Answer 16

actions business takes to overcome a disaster

Question 17

Porters generic strategies

Answer 17

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

Question 18

Gearing

Answer 18

percentage of businesses capital that comes from borrowing

Question 19

Cash flow

Answer 19

money flowing in and out of business

Question 20

3 types of budgeting

Answer 20

income, expenditure, profit

Question 21

Income budget

Answer 21

prediction of revenue

Question 22

Expenditure budget

Answer 22

prediction of spending

Question 23

Profit budget

Answer 23

prediction of profit

Question 24

Variance analysis

Answer 24

explaining why budgeted figures are different to actual figures

Question 25

Liquidity

Answer 25

position of business tells us how able it is to pay bills, if business has more cash available, then better liquidity position

Question 26

Profitability

Answer 26

tells how much profit business makes in comparison to revenue

Question 27

Market share

Answer 27

percentage of the sales revenue in a whole market that one business is responsible for

Question 28

Resource utilisation

Answer 28

how much business resources they are using

Question 29

Difference between profit and cash?

Answer 29

profit = revenue- costs
cash = how much money business has right now

Question 30

Strategy

Answer 30

long term decision making

Question 31

Tactics

Answer 31

short term decision making

Question 32

Operational decisions

Answer 32

day to day decision making

Question 33

Seasonal variation

Answer 33

caused by changes in demand in different seasons

Question 34

Cyclical variation

Answer 34

variation over several years

Question 35

Decision making process

Answer 35

risk
uncertainty
opportunity cost
rewards