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Business Paper 2 > Strategy implementation > Flashcards

Strategy implementation Flashcards

1
Q

What is a strategy ?

A

Where the business is trying to get to in the long term

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2
Q

What is a corporate strategy ?

A

Where the entire business is trying to get to in the long term to meet stakeholder needs

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3
Q

What is a divisional strategy ?

A

Plans implemented by a product or geographical division

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4
Q

What is a functional strategy ?

A

Single operational areas within a division to help achieve the corporate strategy

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5
Q

What is strategic direction ?

A

Course taken by a business in order to achieve its goals

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6
Q

What are tactics ?

A

Smaller and short term goals that help achieve the strategy, need to be flexible and adaptable

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7
Q

What is a corporate plan and what does it do ?

A

Determines goals to achieve in the future and how it intends to accomplish them.
1. Sets outs business strategy
2. Help plan and prepare resources needed
3. Set out measurable targets
4. Reviewed each year

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8
Q

What are 3 advantages of corporate planning ?

A
  1. Give business certainty
  2. Clear targets = motivating
  3. Managers can anticipate potential threats
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9
Q

What are 3 disadvantages of corporate planning ?

A
  1. Risk of being quickly outdated = trends
  2. Time consuming
  3. Must be flexible or will miss out on opportunities
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10
Q

What are 3 advantages of strategies ?

A
  1. Enables understanding customers better
  2. Can anticipate wants and needs
  3. Help product meet customer needs while being differentiated
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11
Q

What are 2 disadvantages of strategies ?

A
  1. Required collaboration with all business and suppliers
  2. Has to be monitored to avoid competitors gaining advantage or missing opportunities
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12
Q

What is a SWOT analysis ?

A

A method for analysing a business, its resources and environment. Looks at strengths, weaknesses, opportunities and threats

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13
Q

What are 2 advantages of SWOT analysis ?

A
  1. Encourages strategies to covert weaknesses into strengths
  2. Can help with strategic plan
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14
Q

What are 2 disadvantages of SWOT analysis ?

A
  1. May oversimplify what’s happening within business
  2. Can be time consuming and complicated
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15
Q

What are Porter’s five forces ?

A

Analyses nature of competition within an industry or market
1. Threat of new entrants
2. Bargaining power of suppliers
3. Bargaining power of buyers
4. Threat of substitute products or services
5. Rivalry amongst existing competitors

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16
Q

What is a threat to new entrants ?

A

Harder for new businesses to enter the market and makes a market less competitive to make monopoly profits

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17
Q

How can you combat barriers to entry ?

A
  1. Loyalty schemes
  2. Bonuses to customers
  3. Discounts
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18
Q

What is bargaining power of suppliers ?

A

Once suppliers have influence in market, can charge higher prices

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19
Q

What are strategies for bargaining power of suppliers ?

A

Vertically integrating to secure supplier and take it away from competitors

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20
Q

What is bargaining power of buyers ?

A

Customers ability to influence the goods and services they pay for

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21
Q

What are strategies for bargaining power of buyers ?

A
  1. Promotions
  2. Loyalty schemes
  3. Price competitive
  4. Creating strong brand image
  5. USP
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22
Q

What is threat of substitutes ?

A

New technologies and government action can cause this, causes weaker individual power

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23
Q

What are strategies to combat the threat of substitutes ?

A
  1. Improve quality
  2. Reduce selling price
  3. Increase investment in marketing
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24
Q

What is competitive rivalry ?

A

The intensity of competition within the market, can change the pricing strategy implemented

25
What are strategies to combat competitive rivalry ?
1. Availability 2. Reward loyalty 3. Innovation 4. Trends 5. USP 6. Advertising 7. Pricing strategies
26
What are advantages of Porter's five forces ?
1. Can evaluate current situation in the market 2. Shows how to adapt products
27
What are 3 disadvantages of Porter's five forces ?
1. Assumes market forces stay static 2. Doesn't consider non-market forces 3. Only provides snapshot at one point in time
28
What is Ansoff's matrix ?
Alternative growth strategies in a matrix 1. Market penetration 2. Market development 3. Product development 4. Diversification
29
What is market penetration ?
Focuses on increasing sales within existing market with current products
30
What are 2 strategies of market penetration ?
1. Increase market share 2. Loyalty cards
31
What is market development ?
Identifying new markets for existing products
32
What are strategies of market development ?
1. New geographical markets 2. Finding new customers
33
What is product development ?
Targeting new products at existing customers
34
What is diversification ?
Marketing new products into new markets
35
What are advantages of Ansoff's matrix ?
1. Indicates risk in strategies 2. Shows opportunity cost
36
What are disadvantages of Ansoff's matrix ?
1. Theoretical model 2. Doesn't take into account competitor activities
37
What is organic/internal growth ?
Seeking growth by the business' own abilities and resources through new product development, market development, expanding distribution
38
What is inorganic/external growth ?
Seeking growth by completing a merge or takeover
39
What is a merger ?
Two businesses of roughly equal size agree to combine
40
What are advantages of mergers ?
1. Friendly agreement 2. Split ownership
41
What are disadvantages of mergers ?
1. Risk of weak and ineffective leadership 2. Lacking clear corporate strategy
42
What is a takeover ?
A business acquires a controlling interest in another
43
What are advantages of takeovers ?
1. Reduced competition 2. Gain new management 3. New markets
44
What are 3 disadvantages of takeovers ?
1. Expensive 2. No guarantee of success 3. Customer dissatisfaction
45
What is horizontal integration ?
Two businesses operating in the same industry at the same stage of supply chain become one
46
What are advantages of horizontal integration ?
1. Increased EOS, market share and power 2. Reduced production costs 3. Reduction competition
47
What are 2 disadvantages of horizontal integration ?
1. DEOS 2. Possibility of complacency
48
What is vertical integration ?
A business acquires another in same market at different stage of supply chain
49
What are 3 advantages of vertical integration ?
1. Greater control over supply chain 2. Improved access to raw materials 3. Better control over retail distribution channels
50
What are disadvantages of vertical integration ?
1. Less scope for EOS 2. Possibility of complacency
51
What is franchising ?
An agreement where the franchisor allows other franchisees to sell its products or use its name
52
What are advantages of franchising ?
1. Tried and tested products 2. Promotional activity paid for 3. Established business
53
What are disadvantages of franchising ?
1. Royalty fees 2. Limited opportunities to show initiative 3. Risk of DEOS
54
What is rationalisation ?
Reorganising production to increase productivity and efficiency
55
What are 3 strategies of rationalisation ?
1. Relocating staff 2. Locating nearer to suppliers 3. Reducing unit costs while maintaining quality
56
What is outsourcing ?
Transferring jobs to an externally third party for a significant period of time
57
What are advantages of outsourcing ?
1. Lower unit costs 2. Specialised suppliers and services 3. EOS
58
What are disadvantages of outsourcing ?
1. Poor employee and public relations 2. Loss of brand recognition

Business Paper 2 (9 decks)

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