corporate objectives

Question 1

what is hierarchy of business objectives

Answer 1

1. aim
2. objectives
3. corporate objectives
4. functional objectives

Question 2

what are corporate aims

Answer 2

• long term goal of the business
• less specific than objectives
• communicate through a mission statement

Question 3

the purpose of setting objectives

Answer 3

1. focus on the direction of the business
2. provide a framework to assist in the development of objectives and strategies
3. point of reference to judge process against

Question 4

what is a mission statement

Answer 4

A declaration of the business’s purpose and value. describes what it considers to be the business’s core activities and helps guide the decision making of the business

Question 5

the purpose of a mission statement

Answer 5

• make a commitment to its customers

- bring the workforce together with a shared purpose and create a strong corporate culture

Question 6

what is a corporate objective

Answer 6

how the business intends to achieve its aim

Question 7

aspects of a corporate objectives

Answer 7

• set by senior manger or directors
• specific to the business
• fit with its aim and mission statement
• focus on desired performance over time
• need to be SMART
• covert a range of key areas rather than a single objective

Question 8

what 8 area PETER DRUNKER suggest about corporate objectives should cover

Answer 8

1. employees
2. innovation
3. management
4. market structure
5. physical and financial resources
6. productivity
7. profitability
8. public responsability

Question 9

functional objectivities

Answer 9

set day to day goals of the finance, operations, marketing and human resources departments. They need to be aligned and consistent with the corporate aim.
- this allows the business formulate its corporate strategy

Question 10

what is a corporate strategy

Answer 10

this is the overall approach to be taken by the business in order to achieve its aim and objectives

Question 11

the link between function objectives and corporate objectives

Answer 11

functional objectives are meant to act as the servant to master corporate objectives.
relate to 4 business functions - human resources, finance, operations, marketing

Question 12

Define strategy

Answer 12

is a plan of action designed to achieve a long term or overall aim

Question 13

what are the 4 model that assist businesses in the development of a corporate strategy

Answer 13

1. Ansoff matrix
2. Porters strategic matrix
3. Boston’s matrix
4. Key’s distinctive capabilities

Question 14

what is Ansoff’s matrix

Answer 14

is a strategic tool to help achieve growth by presenting the product and market choices available to a business

Question 15

what are the elements of the Ansoff’s matrix

Answer 15

existing product + existing market =market pentation
existing product + new market = market development
new product + existing market= product development
new product + new market = diversification (related / unrelated)

Question 16

define product

Answer 16

what the business sells or provides

Question 17

define market

Answer 17

who the business sells to or where it sells

Question 18

market penetration

Answer 18

e.g. advertising , monopoly
existing product in an existing market
uses the marketing mix (4p’s) to increase market shares
+ have information on competitors and customer needs, so no new market research
+low risk strategy

Question 19

market development

Answer 19

• existing product and new market
• aim to increase the sales of their existing product portfolio.
  The approaches: new geographical markets, new distribution markets, new product dimensions, different products polies.
  _the strategy relies on understanding local habits, tastes and needs to make modifications to new markets

Question 20

product development

Answer 20

• new product existing market
• require the development of new competencies and modified products
  _ expensive research, development costs, investment in promotion
• approaches: related product/ services identified by market research or new model of a product

Question 21

diversification (Ansoff)

Answer 21

• new product and new market
  _ risky strategy because of lack experience
• related: expanding into similar products lines (forward, backwards and horizontal integration)
• unrelated: expanding into market that they have no experience in (conglomerate integration)
  + no longer relies on single market or product

Question 22

porter’s genetic strategy

Answer 22

looks at gaining a competitive advantage

Question 23

the element of the porters genetic strategies

Answer 23

competitive advantage and market scope
costs + mass = cost leadership
costs + niche = cost focus
differentiation + mass = differentiation leadership
differentiation + niche = differentiation focus

Question 24

define competitive advantage

Answer 24

A set of unique features of a business and its products that are perceived by customers as superior to its rival

Question 25

ways to gain a competitive advantage

Answer 25

``` Superior quality or design Creative advertising After sales service Flexibility Reputation Ethical stance Lower prices due to economies of scales ```

Question 26

cost leadership (porters)

Answer 26

aim to be competitive through having lower cost | allows the business to have economies of scale

Question 27

methods of cost leadership

Answer 27

- high levels of productivity - high capacity utilization - use of bargaining power to negotiate the lowest prices for production input - lean production methods - effective use of technology in the production process - access to the the most effective distribution channels

Question 28

differentiation leadership

Answer 28

operate in a mass market with unique position instead of low costs usually associated with charging premium prices for the product because of higher costs and added value.

Question 29

methods of differentiation leadership

Answer 29

- superior product quality - branding - industry wide distribution across all major channels - consistent promotional support - advertising and sponsorship

Question 30

cost focus

Answer 30

seek a lower cost advantage in a small market segment | usually a basic/ similar product of a high priced market leader (called a me too product)

Question 31

differentiation focus

Answer 31

aims to differentiation within a small segment of a target market special customer needs allows opportunities to provide different product to competitors allow them to charge higher prices through expertise or added value

Question 32

what is the Boston matrix

Answer 32

the Boston matrix is a model which helps business's analysis the market position of their products/ brand

Question 33

what are the element of the Boston matrix

Answer 33

``` market share and market growth high + high = star high + low = cash cow low + high = question mark low + low = dog ```

Question 34

star

Answer 34

- high growth product - strong product compared to competitors - needs heavy investment to sustain growth - hold on to - star becomes cash cow as growth slows

Question 35

cash cow

Answer 35

- milk it - high market shares and low growth - mature successful product - low need for investment - continued profit (strong cash flow) - allows the business to support its star

Question 36

question mark

Answer 36

- low market shares and high growth - need substantial investment to gain market share - hard to manage which one to keep - build

Question 37

dog

Answer 37

low growth and low market shares is cash natural so has poor future prospects usually sold or closed divest

Question 38

evaluations of the Boston matrix

Answer 38

+ assist the business in identifying which Ansoff's and/or porters strategy to adopt - simplistic model - no guaranteed success - dogs can be profitable (just less) - doesn't look at the harmony of products

Question 39

ways to gain a competitive advantage

Answer 39

``` Superior quality or design Creative advertising After sales service Flexibility Reputation Ethical stance Lower prices due to economies of scales ```

Question 40

define distinctive capabilities

Answer 40

is a form of competitive advantage that is difficult for competitors to imitate. As it cannot be easily copied, it makes it a sustainable competitive advantage.

Question 41

3 types of distinctive capabilities

Answer 41

'air' 1. architecture - contracts and relationships within and around the business (corporate culture) 2. innovation - investing in the innovation of new products/ services 3. reputation - excellent brand image built over time associated because of quality, reliability, service, honesty and prestige.

Question 42

the difference between strategic and tacticals

Answer 42

``` strategic = long term, hard to reverse, relate to overall goal tactical= short term, responding to current business conditions ```

Question 43

the differences between human physical and financial resources

Answer 43

human = recruitment, training, redundancy, motivation physical = investments in fixed assets (machinery, buildings and locations) financial - sources of finance such as retained profit, sale of assets, share issue or short term cash flow requirements.

Question 44

define SWOT analysis

Answer 44

is a method for analysis a business's resources and its environment

Question 45

what is SWOT analysis

Answer 45

``` S - strengths W - weakness O - opportunities T - threats is an analysis technique used to support strategic decisions match = strength with opportunities covert = weaknesses into strengths ```

Question 46

elements of SWOT analysis

Answer 46

positive factors + internal = strengths negative factors + internal = weakness positive factors + external = opportunity negative factors + external = threats

Question 47

what does SWOT analysis aim to discover

Answer 47

1. what the business does better than competitors 2. what the competition does better 3. whether its making the most of opportunities available 4. how the business should respond to changes in its external environment