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A-Level Business > Business objectives and strategy > Flashcards

Business objectives and strategy Flashcards

1
Q

What is a mission statement?

A

A statement of the businesses core aims, phrased in a way to motivate employees and to stimulate interest by outside groups

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2
Q

What is a vision statement?

A

A statement of what the organisation would like to achieve or accomplish in the long term

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3
Q

Pros of mission statements?

A
  • They inform viewers what the central aim of a business is
  • Help motivate employees
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4
Q

Cons of mission statements?

A
  • Too vague
  • Impossible to analyse or disagree with
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5
Q

What is Corporate social responsibility (CSR)?

A

A strategy undertaken by companies to not just grow profits, but to take an active and positive social role in the world around them

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6
Q

Pros of a business’ CSR profile to the business and its stakeholders?

A
  • Improves business profitability and value e.g. the introduction of energy efficiencies
  • Enhances a businesses reputation for example investors may look for a business with a CSR profile
  • Customers are drawn to those businesses that have reputation of being a good corporate citizen
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7
Q

Cons of a business’ CSR profile to the business and its stakeholders?

A
  • CSR costs money to implement
  • Conflicts the profit motive
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8
Q

What is a stakeholder?

A

A stakeholder is defined as somebody or a group of people who have an interest in a business

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9
Q

What are the different types of stakeholders?

A
  • Owners
  • Employees
  • Government
  • Customers
  • Suppliers
  • Local community
  • Competitors
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10
Q

What is a business plan?

A

A written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts

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11
Q

What is in a business plan?

A
  • The nature of the business
  • The product/service it offers
  • Objectives and strategy
  • Business’ approach to marketing
  • Founders and employees
  • Firms operations
  • Forecast on future sales
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12
Q

Who needs a business plan?

A
  • Entrepreneurs or anyone trying to set up a business
  • Potential investors
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13
Q

What is the purpose of a business plan?

A
  • To secure external funding
  • Ensure the firm develops a healthy financial structure
  • Help identify problem areas that the business might face
  • As a focus to set targets
  • Provide realistic expectations
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14
Q

Pros of a business plan?

A
  • Sets out firms visions
  • Allows firms to plan ahead and set financial contingencies
  • Attract investors
  • Allows for identification where external assistance may be needed
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15
Q

Cons of a business plan?

A
  • Time consuming
  • Does not account for external factors such as a recession
  • Lack of freedom
  • Bias
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16
Q

What is a business aim?

A

Where the business wants to be in the future, its goals. A statement of purpose e.g. “we want to grow the business into europe

17
Q

What is a business objective?

A

Business objectives are stated, measurable targets of how to achieve business aims. e.g. “we want to achieve sales of €10 million in European markets in 2021

18
Q

What is an organisational aim?

A

Where the business wants to go in the future, its goals. Statement of purpose

19
Q

What is a Corporate/business objective?

A

Long term goals of the business e.g. Survival, profit or growth

20
Q

What are operational objectives?

A

The medium to long term goals of the functions within a business, helping it achieve its corporate objectives. Businesses will set a range of corporate objectives such as minimising cost and increasing market share

21
Q

What are strategic objectives?

A

Long term

22
Q

What are tactical objectives?

A

Short term - day to day

23
Q

What are the general aims of firms in the private sector?

A

Maximise the profits for shareholders and owners

24
Q

What are the general aims of the public sector?

A

To provide services to the community

25
Q

What are the general aims of the third sector?

A

To raise money and increase awareness for good causes

26
Q

Why might a business change its objectives over time?

A
  • A business may achieve it objective quicker than expected and need another one
  • The competitive environment might change
  • Technology might change product designs
27
Q

What is contingency planning?

A

The aim of contingency planning is to minimise the impact of a significant foreseeable event and to plan for how the business will resume normal operations after the event

28
Q

What are the 3 approaches a business can take to manage risk?

A
  • Risk management
  • Contingency planning
  • Crisis management
29
Q

What is risk management?

A

Identifying and dealing with the risks threatening a business

30
Q

What is contingency planning?

A

Planning for unforeseen events

31
Q

What is crisis management?

A

Handling potentially dangerous events for a business

32
Q

What is the 4 step process of contingency planning?

A

1) Identifying what and how things might go wrong
2) Understand the potential effects if things go wrong
3) Devising plans to cope with threats
4) Putting in place strategies to deal with the risks before they happen

33
Q

What is risk?

A

Investing time, money and effort into a new project that may not be successful

34
Q

What is reward?

A

The return received from investing in a new project or idea

35
Q

What is pure risk?

A

Pure risk is an event beyond someone’s personal control

36
Q

What is speculative risk?

A

Carries the possibility of a gain aswell as a loss

37
Q

What are examples of internal causes of uncertainty?

A
  • Industrial action by employees such as going on strike
  • Fire or theft
  • Losing good employees to competitors
38
Q

What are examples of external causes of causes of uncertainty?

A
  • Economic uncertainty such as a recession
  • Natural disasters
  • New legislation
  • Developments in technology
  • Social changes such as tastes and fashion

A-Level Business (4 decks)

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