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corporate objectives Flashcards

1
Q

what is hierarchy of business objectives

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

what are corporate aims

A
  • long term goal of the business
  • less specific than objectives
  • communicate through a mission statement
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3
Q

the purpose of setting objectives

A
  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
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4
Q

what is a mission statement

A

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

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5
Q

the purpose of a mission statement

A
  • make a commitment to its customers

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

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6
Q

what is a corporate objective

A

how the business intends to achieve its aim

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7
Q

aspects of a corporate objectives

A
  • 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
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8
Q

what 8 area PETER DRUNKER suggest about corporate objectives should cover

A
  1. employees
  2. innovation
  3. management
  4. market structure
  5. physical and financial resources
  6. productivity
  7. profitability
  8. public responsability
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9
Q

functional objectivities

A

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

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10
Q

what is a corporate strategy

A

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

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11
Q

the link between function objectives and corporate objectives

A

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

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12
Q

Define strategy

A

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

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13
Q

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

A
  1. Ansoff matrix
  2. Porters strategic matrix
  3. Boston’s matrix
  4. Key’s distinctive capabilities
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14
Q

what is Ansoff’s matrix

A

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

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15
Q

what are the elements of the Ansoff’s matrix

A

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)

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16
Q

define product

A

what the business sells or provides

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17
Q

define market

A

who the business sells to or where it sells

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18
Q

market penetration

A

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

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19
Q

market development

A
  • 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
20
Q

product development

A
  • 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
21
Q

diversification (Ansoff)

A
  • 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
22
Q

porter’s genetic strategy

A

looks at gaining a competitive advantage

23
Q

the element of the porters genetic strategies

A

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

24
Q

define competitive advantage

A

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

25
Q

ways to gain a competitive advantage

A 
Superior quality or design
Creative advertising
After sales service
Flexibility
Reputation
Ethical stance
Lower prices due to economies of scales
26
Q

cost leadership (porters)

A

aim to be competitive through having lower cost

allows the business to have economies of scale

27
Q

methods of cost leadership

A
  • 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
28
Q

differentiation leadership

A

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.

29
Q

methods of differentiation leadership

A
  • superior product quality
  • branding
  • industry wide distribution across all major channels
  • consistent promotional support - advertising and sponsorship
30
Q

cost focus

A

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)

31
Q

differentiation focus

A

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

32
Q

what is the Boston matrix

A

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

33
Q

what are the element of the Boston matrix

A 
market share and market growth 
high + high = star 
high + low = cash cow 
low + high = question mark 
low + low = dog
34
Q

star

A
  • high growth product
  • strong product compared to competitors
  • needs heavy investment to sustain growth
  • hold on to
  • star becomes cash cow as growth slows
35
Q

cash cow

A
  • 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
36
Q

question mark

A
  • low market shares and high growth
  • need substantial investment to gain market share
  • hard to manage which one to keep
  • build
37
Q

dog

A

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

38
Q

evaluations of the Boston matrix

A

+ 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
39
Q

ways to gain a competitive advantage

A 
Superior quality or design
Creative advertising
After sales service
Flexibility
Reputation
Ethical stance
Lower prices due to economies of scales
40
Q

define distinctive capabilities

A

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.

41
Q

3 types of distinctive capabilities

A

‘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.
42
Q

the difference between strategic and tacticals

A 
strategic = long term, hard to reverse, relate to overall goal 
tactical= short term, responding to current business conditions
43
Q

the differences between human physical and financial resources

A

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.

44
Q

define SWOT analysis

A

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

45
Q

what is SWOT analysis

A 
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
46
Q

elements of SWOT analysis

A

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

47
Q

what does SWOT analysis aim to discover

A
  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

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