Business objectives and strategy Flashcards
What is a mission statement?
A brief statement written by the business describing its purpose and objectives to encapsulate its present operations.
Who is the statement for and why?
- Society (explain purpose)
- Employees (shared purpose)
- Customers (make a commitment)
- Investors (attract)
What are the criticisms of a mission statement?
- just PR?
- too vague and general
- actions may not support claims
- everyone needs to buy in to make it effective
- regarded cynically by staff
What is a corporate objective?
Objectives of a medium to large sized business as a whole. Should be specific to the company and its mission statement.
What are the components of porters modal of generic strategies?
- Cost leadership (broad market, cost advantage)
- Cost focus (narrow market, cost advantage)
- Differentiation leadership (broad market, differentiation advantage)
- differentiation focus (narrow market, differentiation advantage)
What are the features of cost leadership?
- standard products
- enjoy best profits
- exploit economies of scale
- lowest cost producer in the industry
- high capacity utilisation
- lean production methods
What are the characteristics of differentiation focus?
- Differentiates within a small target market segments
- Needs to make sure customers actually have different wants and needs
- niche market strategy
- high prices (value added)
What are the characteristics of differentiation leadership?
- Competitive advantage
- premium prices (reflects high production costs - value added)
- branding
- superior product quality
What are the components in Ansoff’s Matrix?
- Market penetration (existing product, existing market)
- Market development (existing product, new market)
- Product development (new product, existing market)
- Diversification (new product, new market)
What are the characteristics of market penetration?
- High market share (promotional strategies)
- Doesn’t need much investment
- Drives out competition (pricing strategies)
- High loyalty in consumer base
What are the characteristics of market development?
- New geographical markets
- New product dimensions
- New distribution channels
- New market segment.
What are the characteristics of product development?
- Being first in the market
- Research and development + innovation
- Detailed insights into consumer demand
- development of new competencies
What is kay’s distinctive capabilities?
A form of competitive advantage that sustainable because it cannot easily be replicated by a competitor.
What are the three types of distinctive capabilities made by Kay?
- Architecture (contracts and relationships within and around the organisation)
- Reputation (quality and brand image)
- Innovation (research, low costs, development)
What does SWOT analysis stand for?
- Strengths (internal)
- Weaknesses (internal)
- Opportunities (external)
- Threats (external)
