Business Objectives and strategy Flashcards
what is a mission statement?
a statement which sets out the purpose of the business to all it’s stakeholders
what are corporate aims and goals?
They are ways to help achieve the mission statement
Corporate aims and goals depend on what 3 things?
age
size
market
what are corporate objectives strategies?
Objectives that the whole business aim towards
what are department objective strategies?
They are objectives for each department to achieve to achieve the overall objective
why might stakeholders create conflict?
Because they do not agree with the aims of the business
what 3 things demonstrate a culture within a business?
the recruitment process
how long employees stay
personality of the team
what 3 things will a business have if they have a strong culture?
staff understand and respond to culture
consistent behaviour within the team
little need for policies
what 2 things will a business have if they have a weak culture?
inconsistent behaviour
little alignment with business values
why is culture important?
because it influences all the business (pervasive)
what does SMART stand for?
specific measurable achievable realistic time related
what are the four types of corporate culture?
power
task
person
role
what is a power culture?
control radiates from within
autocratic
what is a role culture?
bureaucratic
don’t work with others in different departments
what is task culture?
project orientated
small teams working together on a project
laissez faire
what is person culture?
runs own business
e.g. doctor
what are 3 ways in which you can minimise risk?
emergency funding
back up data
insurance
Describe the decision making process
identify objectives collect information and ideas analyse choose a course of action carry out decision outcome evaluate and report
what is an intuitive decision?
decisions made by gut-feeling. Based on past experiences
what is a strategic decision?
high risk decision. About the bigger picture
what is a tactical decision?
how to achieve the decision
what is an operational decision?
decisions made everyday, low risk decisions
who is likely to make a strategic decision?
owners or board of directors
who is likely to make a tactical decision?
managers
who is likely to make an operational decision?
employees or supervisors
how much resources are needed to make a strategic decision and what is an example of a strategic decision?
A lot is needed
e.g. whether to merge
how much resources are needed to make a tactical decision and what is an example of a tactical decision?
Some resources
e.g. introduce new working arrangements
how much resources are needed to make an operational decision and what is an example of an operational decision?
not a lot
e.g. when to go to lunch
what are the 3 types of constraints on decision making?
internal
external
quality of decisions
what are two example of internal restraints to decision making and explain them?
People’s behaviour- chose not to do it and so wont work.
Ability of finance- wanting to take over and not being able to afford it ,for example. This limits the decisions available.
what are two example of external constraints on decision making and explain them?
competitors- copying so customers don’t go there because they already have a place to go.
Lack of technology- technology not designed to be able to make these decisions
what are two example of quality of decisions constraints and explain them
how big is the risk?- big=more time needed
human element- they can make mistakes or can let emotions get the better of them e.g. firing employees
what is a SWOT analysis?
a strategic planning tool that separates influences on a business’s future success into internal and external factors
what does SWOT mean?
strengths
weaknesses
opportunities
threats
Which of SWOT is internal?
strengths and weaknesses
which of SWOT is external?
opportunities and threats
what 2 things does a SWOT analysis allow you to do?
overcome weaknesses with strengths
define realistic goals
what are 2 strengths of a SWOT analysis?
identifies it’s weaknesses
easy to completer and understand
what are 2 weaknesses of a SWOT analysis?
doesn’t provide solutions
not all the information is useful
what is porter’s 5 forces?
a framework to analyse the level of competition within an industry and gives an overview of that industry
what are the 5 key areas of porter’s 5 forces?
the threat of entry the power of buyers the power of suppliers the threat of substitutes competitive rivalry
give an example that could be a threat of entry
established brand names
give an example that is a power of buyers
there are channels of distribution;
- modern
- traditional
- direct
give an example that is threat of substitutes?
other similar products in the industry;
tea
coffee
juice etc
give an example of power of suppliers
raw materials;
water
gas
give an example of competitive rivalry
Duopoly; competition between 2 having the market share
what is organic growth?
a company is growing organically when it is increasing the turnover of it’s existing business.
what is external growth?
a company is growing by acquiring other companies
what is 3 reasons why you would want to grow?
generate more sales/profit
economies of scale
employ more people
what are 3 ways in which organic growth can be achieved?
opening up a new shop/warehouse
expanding your existing product range
increasing output
what are 3 problems associated with organic growth?
slower
more gradual
market wont allow it-not enough room, competitors
what is a benefit of a external growth?
fast expanison
what are 3 problems with external growth?
job losses
different cultures mean it is difficult to match up
disagreements between managers
what is a hostile takeover?
buying shares without consent?
what is a friendly takeover?
buying shares with company knowledge
what is a de-merger?
a joint company split to form 2
what is management buy outs?
managers buy out directors so they own the company
what is management by ins?
managers buy shares
what is private equity buyouts?
a private investment company aggressively buys a controlling share in a business. They then sell off parts/all of the business and then sell the rest off for profit.
what are 3 reasons for mergers?
quick way to expand
synergies(working close with a business already)
defensive reasons(compete better in the market)
