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business component two > strategy and implement + decision making models > Flashcards

strategy and implement + decision making models Flashcards

1
Q

what is the relationship between objectives and strategy?

A

a strategy is the way a business operates, so it may direct the way a business carries out its objectives.

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2
Q

corporate strategy

A

strategic decisions affecting the entire business.

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3
Q

strategic direction

A

the route a business will follow to achieve corporate objectives.

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4
Q

divisional strategy

A

directing the divisions, to help aid the corporate decisions, but are more specific to certain areas in a business i.e., geographical.

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5
Q

functional strategy

A

relates to a single functional operation (FMOP).

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6
Q

what is the relationship between strategy and tactics?

A

strategy is the overarching plan or goal that a business will set, and the tactics are the small steps they take in order to achieve that.

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7
Q

what is a corporate plan?

A

a corporate plan is a statement of organisational roles that are medium to long term, based on management assessments.

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8
Q

what is SWOT?

A

s trengths
w eaknesses
o ppurtunities
t hreats

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9
Q

explain the nature and purpose of the Ansoff Matrix.

A

analyses the various risks and rewards associated with different strategies, with a low-risk option (market penetration), two medium-risk options (product development and market development) and a high-risk option (diversification).

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10
Q

evaluate business strategy.

A
  • long term aspect gives a roadmap
  • this leads to productivity due to specificity
  • however, could fail due to the likes of insufficient management.
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11
Q

evaluate corporate plans.

A
  • as they affect the whole business, they all have one common goal.
  • may motivate employees to work harder, therefore, increasing efficiency.
  • however, businesses may not have efficient funds to maintain sufficient corporate plans, leading to failure.
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12
Q

evaluate the usefulness of the Ansoff matrix.

A
  • leads to the likelihood of minimised risks and rewards.
  • less likely to suffer loss.
  • however, it is only a forecast, so the market may change.
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13
Q

what are the two types of growth?

A

organic and artificial

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14
Q

what is organic growth?

A

internal growth (FMOP)

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15
Q

what are features of organic growth?

A

time consuming, low risk, easier to control

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16
Q

what are the advantages of organic growth?

A
  • helps motivate staff

- can lead to efficiency

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17
Q

what are the disadvantages of organic growth?

A
  • time consuming

- may affect employee motivation (internal)

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18
Q

what is external growth?

A

external (takeover or merger)

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19
Q

what are the features of external growth?

A

high risk, rapid

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20
Q

what are the advantages of artificial growth?

A
  • quick (quick sales, reputation)

- business already established

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21
Q

what are the disadvantages of artificial growth?

A
  • high risk

- cultural differences

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22
Q

what is horizontal growth?

A

-businesses are doing the same thing, and are at the same point of production.

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23
Q

what is vertical growth?

A
  • businesses join at different stages of production
  • (backwards vi = primary - tertiary)
  • (forwards vi = tertiary - primary)
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24
Q

what are the advantages of vertical integration?

A

allows the business to have control over more sections of the business i.e., extraction of materials.

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25
what are the advantages of vertical growth?
- more control over overall production | - motivate employees seeing process
26
what are the disadvantages of vertical growth?
- corporate objectives may clash - cultural differences - different stage of production may lead to confusion
27
what are the advantages of horizontal integration?
- business interests are shared - share resources - economies of scale - advantage over competition
28
what are disadvantages of horizontal integration?
- reduced flexibility | - risk of diseconomies of scale
29
what is franchising?
when one business (franchisor) gives another business (franchisee) permission to trade using the franchisors name, goods or service
30
in what way is franchising a two way relationship?
- franchisee pays initial fee to franchisor - franchisee pays annual fee to franchisor - franchisor must support the franchisee (advertising, training)
31
what is an advantage of being a franchisor?
- rapid expansion - economies of scale - investment - motivation
32
what is a disadvantage of being a franchisor?
- loss of control - managing growth - litigation (failed franchisee = court)
33
what is an advantage of being a franchisee?
- lower risk - established brand - assistance
34
what are the disadvantages of being a franchisee?
- lack of control | - higher than expected start up costs
35
what is rationalisation?
the reorganisation of a business in order to increase its efficiency.
36
what does rationalisation lead to in a business?
- reduction in business size - change in policy - alteration of strategy
37
what are examples of rationalisation?
- closing of branches - transferring of production - trimming of product ranges - incorporation of IT systems (replacing paper systems).
38
what are disadvantages of rationalisation?
- loss of jobs - industrial action - resistance from staff - uncertainty
39
what is competitive advantage?
advantage over competitors by offering consumers greater value i.e., lower prices, greater benefits
40
what are pros of competitive advantage?
- customer loyalty - market share - potential to charge a premium price
41
what are some difficulties of maintaining a competitive advantage?
- competitor's actions (copying) - inability to maintain barriers to entry - changing external environment
42
what are Porter's five forces?
- supplier power - threat of substitutes - customer power - threats of new entrants - market competitors
43
what is business change?
change occurs when a business alters its structure, size or strategy to respond to internal or external influences/
44
why does a business change?
- meet objectives - respond to external forces - respond to internal forces - gain competitive advantage
45
what is business growth?
increasing the size of business operations i.e., new stores, new products, new markets, buying other businesses.
46
why do businesses grow?
- increase shareholder value - increase market share - reduce average costs - fulfil an objective growth
47
what is retrenchment?
decreasing the size of business operations i.e., closing branches, delayering
48
why do business' retrench?
- restructure to increase efficiency - turn around poor performance - focus on core business - sell off less profitable parts of the business
49
what are factors to consider when relocating a business?
- regional (access to market, social reasons, historical reasons, cost of production). - international (tax advantages, footloose businesses, freedom from restrictions, access to international markets).
50
what is outsourcing production?
using another business to produce your product in order to maximise business abilities, and allow more time to be allocated for different functions
51
why is decision making important?
it plays a vital role in management, and allows business' to decide what they want their goals to be
52
what is scientific decision making?
using data in order to make a decision
53
what is intuitive decision making?
making a judgement off of 'gut instinct' or a persons experience
54
what is intuitive decision making?
making a judgement off of 'gut instinct' or a persons experience
55
what is a decision tree analysis?
a flow chart that analyses possible response options, to then analyse resulting outcomes.
56
what are the benefits of decision trees?
- choices are set out logically - probabilities allow risk to be addressed - easy and tangible
57
what are the drawbacks of decision trees?
- probabilities are only estimates - uses quantitative data only - doesn't necessarily reduce risk
58
what is critical path analysis (CPA)?
a project planning method that focuses on identifying tasks that are dependant on other tasks for (time based) completion.
59
what are the benefits of critical path analysis?
- encourages careful assessment of requirements - decision-making and planning tool in one - helps reduce risk and costs of complex projects
60
what are the drawbacks of critical path analysis?
- based on assumptions and estimates - too many activities may become complicated - doesn't guarantee success
61
what is cost benefit analysis?
process used to measure the benefits of a decision minus the costs associated with making that decision.
62
what are benefits of cost benefit analysis?
- good guide for decision making | - can be standardised and quantified
63
what are the drawbacks of cost benefit analysis?
- time needed to carefully construct | - estimates and forecasts may be biased or wrong
64
how does information technology help in decision making?
helps enhance data, easier retrieval and referral.

business component two (7 decks)

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