Business Objectives And Strategy Flashcards
Corporate objectives
corporate objective is a specific performance goal set by senior management for the business to achieve over time.
SMART
Specific, measurable ,achievable, relevant and time
Mission statement
A mission statement is an expression of a business’s overall aim as well as its core values and context.
Functional objectives
A functional objective is the day-to-day goal of functions or departments within the business, derived from the overall corporate objectives.
Why do functional objectives need to be carefully aligned across departments?
Functional objectives must be carefully aligned across departments so that all parts of the business are working towards the shared goal
Define the term corporate strategy
A corporate strategy is a successful plan to achieve corporate objectives and helps to provide a competitive advantage
What does Ansoff’s matrix identify?
Ansoff’s matrix identifies an appropriate corporate strategy to achieve the objective of growth and the level of risk associated with the chosen strategy.
What is the meaning of diversification?
Diversification is a risky growth strategy, as it involves targeting a new market with entirely new or redeveloped products
True or False?
Porter’s Generic Strategic Matrix recommends businesses adopt either a cost leadership or a diversification strategy to achieve competitive advantage.
False.
Porter’s Generic Strategic Matrix recommends businesses adopt either a cost leadership or a differentiation strategy to achieve competitive advantage.
True or False?
A business operating in the mass market should always adopt a cost leadership strategy.
False.
A business operating in the mass market could adopt either a cost leadership or a differentiation strategy, depending on what it is that makes them stand out from their competitors
Define the term cash cow.
A cash cow is a product sold in lower-growth markets where it has a high market share and generates more cash than it needs to maintain its market position
What is the aim of portfolio analysis?
The aim of portfolio analysis is to carry out a detailed evaluation of a full range of products in order that appropriate strategies may be identified and pursued.
According to Ansoff’s matrix, by what term is targeting new markets with existing products known?
Targeting new markets with existing products is known as market development.
True or False?
A market development strategy involves targeting existing markets with new products.
False.
A market development strategy involves finding and exploiting new market opportunities for existing products.
What is a star product in the Boston Matrix?
A star is a product sold in high-growth markets and has a high level of market share.
If a business fails to adopt either a cost or a differentiation focus, what do they risk?
A business that fails to adopt either a cost or a differentiation focus risks being stuck in the middle, unable to compete successfully with rivals in the market.
True or False?
Dogs should be divested.
True.
Dogs have little potential for future growth and should be divested so that finance and effort may be invested in other products.
What is a distinctive capability?
A distinctive capability is a particular business strength that is very difficult for competitors to copy
What are tactical decisions?
Tactical decisions are made to support the overall strategy and are usually short-term.
What does the acronym SWOT stand for?
Strengths
Weaknesses
Opportunities
Threats
State the meaning of opportunity
An opportunity is an option a business may exploit to enjoy further success
True or False?
Economic indicators becoming more favourable is a strength.
False.
Economic indicators becoming more favourable is an opportunity in most cases.
What is a weakness in a SWOT analysis?
A weakness is what a business does poorly, such as ways it lags behind competitors.
True or False?
A SWOT analysis is the same for all businesses at a specific point in time.
False.
A SWOT analysis will vary significantly for businesses of different sizes with different objectives and operating in different sectors.
Define the term threat.
A threat is a hazard that has the potential to damage business performance.
