Business Objectives And Strategy Flashcards
What is a Strategic Objective?
How the business plans to achieve its aims and goals.
What is a Tactical Objective?
The day-to-day objectives a business uses to work towards the overriding goals.
What is an Operational Strategy?
Short-term goals whose achievement brings an organisation closer to its long-term goals.
What is SMART?
Specific Measurable Achievable Realistic Time
Give reasons why SMART Objectives are Important.
- provides a focus for the business
- creates a deadline
- can see if the business is achieving their goals
- allows for comparison
- reduces wastage
Give INTERNAL reasons a business may not achieve its objectives.
- motivation amongst employees
- costs
- size of the business
- business procedures
- workforce in general
Give EXTERNAL Reasons a business may not achieve their objectives.
- competition
- government
- legislation
- state of economic
- trends
Define Mission Statement.
A written and publicised account of the business’ aim/s.
What does an Effective Mission Statement do?
- gives business USP
- defines where the business wants to go
- excites, motivate and guides employees
Why are Mission Statements sometimes Criticised?
- not always supported by business’ actions
- often too vague or just stating the obvious
- viewed as PR exercise
Define Ethics.
Moral guidelines, which govern good behaviour.
Define Corporate Social Responsibility.
When companies integrate social and environmental concerns into their business operations and in their interactions with stakeholders on a VOLUNTARY basis.
Give reasons for a business using CSR.
- ethical thing to do
- improves a business’ reputation
- necessary to avoid regulation
- socially responsible actions can be profitable
- attractive to stakeholders
- helps to correct social problems the business has created
- increase employee motivation
Define Strategy.
How the business plans to achieve something.
Define Corporate Strategy.
Concerned with the overall purpose and scope of the business to meet stakeholder expectations.
Define Business Unit Strategy.
Concerned more with how a business competes successfully in a particular market.
Define Operational Strategy.
Concerned with how each part of the business is organised to deliver the corporate and business unit level strategic direction.
What is the Strategic Management Process?
Strategic Choice Strategic Analysis Strategy Implementation
Define Market Segmentation.
Process of dividing the market of potential customers into different “segments” based on different demographics.
Define STEEPLE Analysis.
An analysis of external factors that could affect a business.
Define SWOT Analysis.
A useful summary technique for summarising key issues arising from an assessment of a business’ internal and external environmental influences.
What is Porter’s Five Forces Model?
A system for analysing the level of competition in an industry, particularly focusing on strategy.
What are the 5 Forces of Porter’s Model?
- threat of substitute
- threat of new entrants
- bargaining power of suppliers
- bargaining power of buyers
- intensity of industry rivalry
Explain Threat of New Entrants (P5f).
- new firms enter market they take a share of the market
- increase competition intensity
- greater barriers to entry, smaller the threat will be
Explain Bargaining Powers Of Supplier (P5f).
- suppliers who can force up the price of their products
- this cuts profit available in industry
- lack of bargaining power of supplies
- increases profitability and lowers competitive industry
Explain Bargaining Powers of Customers (P5f).
- consumers have strong barraging powers
- force prices down
- reduces likely profitability
- acting as consumers, businesses could negotiate over prices for suppliers.
Explain Threat of Substitutes (P5f).
- substitute enter market
- business doesn’t keep up to date with trends
- loses market share
Explain Degree of Competition (P5f).
- highly competitive industries will have innovation, price wars and higher spending on promotion
- reduces level of profitability in industry
Define Internal Audit.
A review of the procedures and organisation within a business.
What would you look at during an Internal Audit?
- operations
- Human Resources
- sales and marketing
- finance
