Component 2 - Strategy and implementation Flashcards
Explain : The relationship between objectives and strategy
Objectives as the foundation - serving as a clear and measurable foundation for success. By defining what the business wants to achieve.
Strategy as the plan: The plan or approach that a business takes to achieve its objectives. It outlines the steps that the business will take to achieve its goals and the resources it will allocate to support its efforts.
Alignment - Objectives and strategy must be aligned, with strategy designed to support the achievement of the business’s objectives.
Flexibility - Objectives and strategy must be flexible, allowing the business to adjust its approach as circumstances change and new challenges arise.
Evaluation - Objectives and strategy must be regularly evaluated, allowing the business to determine whether it is on track to achieve its goals and make adjustments as needed.
Explain : The meaning of strategy including corporate strategy, strategic direction, divisional strategy and functional strategy
Corporate Strategy - The overall approach that a business takes to achieve its objectives across all of its divisions and operations.
Strategic Direction - The overall direction that a business takes in order to achieve its objectives. It outlines the business’s priorities and key initiative.
Divisional Strategy - The approach that a business takes within a specific division or business unit. It is designed to support the overall corporate strategy.
Functional Strategy -The approach that a business takes within a specific function or area of the business.
Explain : The relationship between strategy and tactics
Strategy as the plan: The plan or approach that a business takes to achieve its objectives. It outlines the steps that the business will take to achieve its goals and the resources it will allocate to support its efforts.
Tactics as the specific actions - The specific actions that a business takes to support its strategy and achieve its objectives. Tactics are the concrete steps that the business will take to implement its strategy and bring its plans to life.
Explain : The purpose of corporate plans
Setting goals and objectives - Corporate plans provide a framework for setting goals and objectives for the business, outlining what the business wants to achieve and how it will do so.
Allocating resources - Corporate plans provide a basis for allocating resources, including financial, human, and other resources, to support the business’s goals and objectives.
Evaluating performance - Corporate plans provide a means of evaluating performance, allowing the business to determine whether it is on track to achieve its goals and make adjustments as needed.
Explain : SWOT analysis
A SWOT analysis helps a business to better understand its internal and external environment.
Strengths - Identify the internal strengths of the business, such as its strong brand or talented employees, efficient processes.
Weaknesses - Identify the internal weaknesses of the business, such as outdated technology, poor financial performance or low employee morale.
Opportunities: Identify the external opportunities for the business, such as new markets, emerging technologies, or favourable economic conditions.
Threats: Identify the external threats to the business, such as competition, changing market conditions, or economic uncertainty.
Explain : Apply Porter’s Five Forces framework to a specific business
Porter’s Five Forces framework is a tool used to analyse the competitive environment of an industry and determine its profitability.
Threat of new entrants - The ease with which new companies can enter the industry and compete with existing firms.
Bargaining power of buyers - The ability of buyers to negotiate lower prices or better terms from suppliers.
Bargaining power of suppliers - The ability of suppliers to negotiate higher prices or better terms from buyers.
Threat of substitute products or services - The presence of alternatives that can be used instead of the products or services offered in the industry.
Rivalry among existing competitors - The level of competition among existing firms in the industry.
Explain : The purpose and four Components of the Ansoff matrix
The Ansoff Matrix is a strategic planning tool used to help businesses determine their product and market growth strategy.
The matrix consists of four strategies:
1) Market Penetration - Focusing on increasing sales of existing products to existing customers in existing markets.
2) Market Development - Expanding into new markets with existing products.
3) Product Development - Developing new products for existing markets.
4) Diversification - Entering new markets with new products.
Also Look at a diagram.
Explain : What is meant by horizontal and vertical integration
Horizontal integration - The process of a company expanding its business by acquiring or merging with other companies that operate in the same or similar industry.
The goal of horizontal integration is to increase market share and reduce competition.
Vertical integration - The process of a company expanding its business by acquiring or merging with companies that operate at different stages of the value chain.
The goal of vertical integration is to increase control over the supply chain, reduce costs, and improve efficiency.
Explain : The difference between organic and external growth
Organic growth refers - The internal growth of a business, achieved through the reinvestment of profits and the expansion of existing operations.
External growth - External Growth achieved through acquisition, merger, or partnership with other businesses.
Explain : What is Franchising
Franchising - A method of growth in which a business (franchisor) grants the right to another business (franchisee) to use its brand name, products, services, and operating systems in exchange for a fee.
Explain : What is meant by rationalisation
Rationalization - The process of streamlining operations, reducing waste, and increasing efficiency within a business.
Explain : What is meant by outsourcing production
Outsourcing production refers to the practice of an organization using a third-party supplier to produce goods . This decision to outsource is often made to reduce costs, improve efficiency or access specialized expertise or equipment.
Evaluate : Business strategy and corporate plans
Evaluate : The usefulness of the Ansoff matrix to businesses
Evaluate : Different methods that businesses can use to achieve growth
