miss duddigan-business objectives and strategy Flashcards
what is mission statement
written description of a business aims
used to make stakeholders aware of what business does
encourage employees to work towards its aims
tell you purpose of business
can include how it will achieve its mission, values, standards etc
adv of missions statments
give staff shared purpose and encourage them towards a goal
dis of mission ststmetns
do not have to porve twhat they put in mission statement is accurate
can say what customers want to hear
repuation may be damaged if customers figure out that actions dont reflect values
objectives
turn cooperate aims into specific goals of a business
cooperate objectives
goals of a business as a whole
departmental objectives
fucntions of each department
more specifc and more detailed
manger looks how there department can acheive the cooperate aim set
obejctives should be SMART
Specific
Measurable
Agreed
Realistic
Timely
specific
vague obejctives e.g improve quality done tell staff what they need to do
aims needs to be clear and precise
measurable
if not measurable =, business wont know if achieved or not
agreed
everyone involved needs to know about it and be happy with it
realistic
aim should nto be too ambitious so if not workers wont feel defeated
timely
making sure obejcitve is within a time frame so people awont jjst see it as unimporant and put it aside
strategy
long term plan of action developed to achieve businesses objectives
tactics
short ter plans
techniques used to achieve a strategy
ansoff matrix
Market penetration
Prodcut development
Market develpment
Diversification
market penetration
trying to increase market share in existing market #
e.g advertsiing, pricing strategies
least risky
wroks best in gorwth market rather then saturdated market wherer demand has been met
product development
selling new products in existing market
best when business is gowing, at competitive advantage, high market share
market development
selling existing products to new market
can be doen through repositioning-looks at different segment
can do this by research and development
how it can adapt its product to suit new markets needs
could do this by channles of distribition e.g ecoomerance direcly selling to customers
diverstiifcation
selling new products to new markets
risky
what is aisnoff matrix used for
used to compare levels of risk involved with growth strategies
adv of ainsoff matrix
allows manager to think about risks of moving in certain direction
dis of ainsoff matrix
fails to show that market develpment and diversification require significant chnage on day to day spednign of business
not useful for large, multinational businesses
porters three genetic strategies to gain advantage
Cost leadership
Differentiation
Focus
cat dig fish
cost leadership
lowest cost of production for given level of quality
big firms with efiifcent prodcution facilities achieving economies of scale may use
in price war, can maintain profitbility
in price decline, firm can stay profitable from low costs
differentiation
product with unique attributes
consumers value and believe better then rivals
allow businesses to charge premium prices
strong branding
risks-imiation from other businesses and chnages in consumer tastes
focus
focuses on niche markets
either difefrentiaitning or minimising costs
what does it say if something is not placed in any section of proters genetic strategies
stuck in the middle
helps them steer into a direction
dis of genetic strategies
oversimplistic
only focuses on narorowing down to difefrention and low production costs rather then busiensses acheiveing both
doesnt give info on how to improve
kays model of distincitv ecapabilities
three capbilties for a bsuiensses success
something business is good at over comeptitiors
what are the three cpabialities outline by kay
architecture
reputaion
innovation
ari-star sign
archietecture
describes relsitosnhip between business and its stakeholers
if business can have strong relstionship with starkeholders, more likley to be successful
reputation
business can build good reputation by keeping customers satisfied
e.g good customer service
by creating product which is high quality
customers more lliekly to be loyal
customers more likely to tell others
word of mount increases reputation
innovation
having USP gives competituve advantage
what else do distinctive capabilities need to be
sustainable-maintain capabilities to maintain competitive advantage
appropriate-one busienss not able to copy
boston matrix
question marks -high market growth, low market share
cash cows-low market gorwht high market share
stars-high market share and high market growth
cows-low market share and low market growth
dis of boston matrix
simplified model-only shows high market growth and high market share
does not account for businesses with medium market growth and market share
factors aren’t only factors which indicate profitability
SWOT ANALYSIS
INTERNAL
strengths
weaknesses
EXTERNAL
oppportunities
threats
usefulness of swot analysis
helps managers make tacticl decisions
considers businesses individual circumstances
business will focus on opporutnities
changing weaknessses to strengths
managing threats
adv of swot analysis
can easily be redone if conditions are changed
pestle analysis
looks at external influences on a business
Political
Economical
Social
Technological
Legal
Envioronmental
political
governmental policy on taxation
idea that what goverments choose to do affects business
if want to help new businesses, reduce taxes
may put tax on unhealthy products e.g cigarretes to improve health of nation
economic
change in consumer spending, interste rates, exchnage rates and economica growth
strong economy, low levels of unemployment, have higher income so more liekly to spedn more on non-essential goods
social
cgange in social trends can mean changes in demand
e.g become more concerned about health so demand for sugary drinks fall
then mean they may reconsider their deisgn mix
technological
decisions in new technology may be delayed if better and more efficient technology emerging
proters five forces model
shows industry being infleunced by five competitve forces
decsion making tool
barriers to entry-how easy is it for new firm to get into market
new markets will want to enter makret making similar products
up to existing firms to make it hard for new firms to get in
strategies to raise barriers to enter
threaten new entrants with price war
large businesses most liekly to be benefitting from economies of scale
undercut prices of new entrants (predatory pricing)
however, against EU competitive law
trademakrs (protection of a logo) to make it harder for new entrants to make simialr products
buyer power-buyer wants as low price as possible
buyers have more power when there are fewer of them
buyers have more power when products are standardised
strategies to influence buyer porwer
if buyer increases quantity of product
supplier power-suppliers want to get as high price as possible
suppliers have more power wgen few suppliers but lots of customers
strategies to influence supplier power
businesses can tie other businesses into long term contracts so they cant switch suppliers
threats of subsititutes-how likely customers are to buying an alternative
strategies to reduce threat of subsitutues
difefrentiating product anc creaitng brand loyalty, so reduces threat of substitiutes
canidentify needs of new gorup whos needs arent being quite men and there wont be any other substitutes they can buy from that your offering
rivalry within industry-how much comp there is
streategies to prevent cometition
bigger promotional capaigns to attract more customers
however, expensive so cant be used for all businesses
