Business Unit 1.3

Question 1

Vision statement and mission statement

Answer 1

Vision statement and mission statement
 Vision outlines an organizations aspirations
Describes a desired position for the company in the far future (“Where do
we want to be?”)

 Mission statment
Mission statment is an organization purpose for existence and thier core values

 Vision and mission statement
 Positive, ideal goals
 Parallel to business
 Customer centric
 Answers:
 Where are we now?
 Where do we want to be?
 How do we get there?
 How do we know we are there?

Question 2

Aims, Objectives, strategies and tactics

Answer 2

Aims, objectives, strategies, and tactics
 Aims – long term goals of what the company wants to be
 Objectives – shorter term goals that are specific and measurable
 Individual targets, departmental objectives, divisional objectives, corporate
objectives, mission, aim (pyramid, base to height is left to right)
 Guides and unifies management and workforce
 Basis for strategic planning
 Builds trust and goodwill

Strategies: are the medium to long term plans of actions to achieve the strategic objects of a organizations. Three types of business strategy: Operatiaonl strategies: Day-to-day methods to improve the efficiency of am organization (aim to achvie tactical objectives)
Generic strategies: are those that affect the business as a whole
Coropate strategies: are targeted at the long term of the organization

Tactics are the short term methods used to acheinve an organizations tactical objectives

Tactical objectives: are short term goals that affect a section of am organization. They are specific goals. Tactical objectives tednt to refer to targets set up to 12 months.

Strategies objects: are the longer terms of. abuinsess

Question 3

Ethics and business ethics

Answer 3

Ethics are the moral principle that guide decision making and strategy in the business
Morals are concerned with that is considered to be right or wrong.
Business ethics refer to the actions of people and organisation that are considered to be morally ocrrect

Question 4

Companbies change objectives and innovations due to

Answer 4

interanal and external factors
Internal factors
 Corporate culture – way the organization works (aggressive, chill, etc.)
 Type and size of organization – small or big businesses run differently
 Age of organization – change must be consistent with times
 Financial status – profit goals, how much money the business has to use
 Risk profile of shareholders – If investors are risk-averse or risk-loving
 Private/Public sector
 Private = profit
 Public = serve
 External

 State of economy – strong or depressed economy affects the company
too
 Government constraints – government telling you not to expand
somewhere
 Presence and power of pressure groups – (e.g. not to expand in the
endangered locations)

Question 5

corporate culture

Answer 5

The accepted norms and customs of a business

Question 6

Corporate social responsibility (CSR)

Answer 6

CSR refers to the convern and obigliations of a business in committing to behavior ethically and responsibly towards its shareholders and communities

Concept whereby organizations consider the interests of society by taking
responsibility for the impact of their activities on various stakeholders
 Benefits:
 Better employee recruitment and retention
 Sense of value/purpose for employees
 Boosts company’s image/reputation
 Risk management against scandals, accidents, etc.
 Appeases pressure groups
 Brand differentiation and smoother operations
 Customer loyalty & goodwill
 Disincentives:
 High compliance costs can lower profits
 Forced to use materials that are specialized and may reduce profit
 Ethics are not universal or unchanging anyway
 Lower profits may decrease personal bonuses which may lead to
greediness
 Attitudes change over time; acceptable practices before are unacceptable
today.
 CSR objectives adapt to changes in social norms/hot issues (i.e. tattoos,
dyed hair, jeans, single parents, gender bias, child labor, smoking, obesity,
global warming, etc.)

Question 7

SWOT analysis

Answer 7

Swot analysis is s simple yet very useful decision making tool.
Qualitative form of assessment
 Guides management for future strategies
 Used alongside STEEPLE, which helps to further identify opportunities
and threats
 Internal factors
 Strengths – advantages that are basis for developing competitive
advantage.
 e.g. experienced management, patents, loyal
workforce/customers
 Weakness – negative factors
 e.g. poorly trained workforce, limited capacity, obsolete
equipment, etc.
 External factors

 Opportunities – potential areas for expansion of the business and
future profits
 e.g. political/economical policies, social statistics & trends, etc.
 Threats – hindrances to the business
 e.g. economic environment, market condition competitors.

Question 8

Ansfoff matrix

Answer 8

Ansoff Matrix
 Analytic tool to determine growth strategy by focusing on product/market
combination
 Growth strategies
 Existing product + existing market = Market Penetration (low risk)
 Seeks to maintain or increase market share
 Price adjustments
 Increase of market promotion
 Minor product improvements
 Intense competition

 New product + existing market = Product Development (medium risk)
 Innovation to replace existing products
 Focusing on consumer needs
 Brand extension
 Capitalize on technology
 Consumers in existing market may not like the new product

 Existing product + new market = Market Development (medium risk)
 New distribution channel
 Expanding geographically
 Attract new market segments
 New consumers may not like the product

 New product + new market = Diversification (high risk)
 If successful, higher gains can be reaped from various industries
 Spreads out risks and safeguards against economic shocks over diverse
product portfolio
 Related diversification (same industry – e.g. McDonalds and McCafe)
 Unrelated diversification (different industry – e.g. Zesto and Zest Air)

Question 9

Corporate culture

Answer 9

The accepted norms and customers of a business