Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

A-Level Business > Theme 3 > Flashcards

Theme 3 Flashcards

1
Q

Definition of Mission Statement

A

is a qualitative statement of an organisations aims. A mission statement sets out the purpose and primary objectives of a business in the present.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Hierarchy of business objectives

A

Mission Statement
Corporate Objectives
Department Objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Mission Statement

A

Is a short way of a business expressing their main intent eg Nike’s mission statement is to bring inspiration and innovation to every athlete”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Criticisms of Mission Statements

A

Critics say missions statements are merely a public relations tool

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Corporate Objectives

A

Are SMART objectives usually set by senior management and is aimed to fulfil called a corporate need eg satisfying shareholders by handing out more dividends through schemes of increasing profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

SMART objectives

A

Specific
Measurable
Achievable
Realistic
Time-Related

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Department Objectives

A

Objectives set by individual departments that stem from the corporate objectives. Eg marketing may choose to increase revenue by 2% each year.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Departments within a business

A

Sales
Marketing
Human Resources
Operations
Finance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Purpose of a mission statement

A

Is to outline the purpose and visions of the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Uses of mission statements

A

Focus
Profitability
Identity/ distinguish company from competition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Limitations of mission statements

A

Unrealistic and over optimistic
Can lead to conflicts and inconsistencies if written wrong
Overly ambiguous

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Owners perspective on mission statements

A

Will want to maximise shareholder value of the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Manager perspective on mission statements

A

Look for core aims and objectives to lead staff with

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Employee perspective on mission statement

A

Look for motivational statements that make them feel proud to work for the company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Pressure group perspective on mission statements

A

Look for a clear environment and ethical message

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Customers perspectives on mission statement

A

Look for ethical business principles

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Competitors perspective on mission statements

A

Will look to see if a business is visionary, competitive, innovative and organised

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Corporate Timescales

A

Refers to strategy and the expectation of when a return will be achieved

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Short termism regarding quick financial reward

A

Means that a business is only interested in quick financial reward eg monthly profits over quarterly sales figures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Historical roots of short termism

A

Idea of short-termism coms from a history where we didn’t live long enough to worry and simply were concerned about the present eg overspending, smoking and drug abuse are examples of short-termism

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Lack of development in short-termism

A

Short termism makes businesses fail to innovate and stagnate hence why they should be looking to invest in research projects that will give the business the competitive advantage.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Long Termism

A

Is a business approach that incorporated corporate social responsibility and considers ethical behaviour of the business in regards to the environment and employees as well as focus on long term tech.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Evidence based decision making

A

A form of decision making which is made based on scientific research, organisational facts and figures and benchmarking as well as multiple sources of evidence to increase the probability of a favourable outcome

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

5 steps of evidence based decision making

A

Step 1: translate a problem into a question
Step 2: acquire the evidence
Step 3: appraise to the evidence
Step 4: apply the evidence to the problem
Step 5 assess the outcome of the decision

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Subjective decision making

A

Decision relating to a business which are based on personal perspectives, feelings and opinion aka qualitative research

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Ethics

A

Moral principles that govern a person’s behaviour or the conducting of an activity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Ethical decision

A

Often up in a trade-off with profitability and is where a business chooses to make a decision that acts upon corporate social responsibility

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Ethics vs Profitability and the Deepwater Horizon

A

2010 oil rig caught fire resulting in millions of gallons of oil to spill into the Gulf of Mexico and 11 lives lost all due to the results of cost-cutting. Putting profits ahead of ethics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Executive Pay

A

Refers to a remuneration package specifically designed for business leaders, senior management and executive members

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Employee Pay

A

Is the compensation employers pay to employees for the work they do

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Banker’s Bonuses

A

Are paid to individuals who work in the finance sector in return for behaviour that has gained the bank profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Sponsorship

A

Is the use of a public figure to promote the image of a business eg Cristiano Ronaldo and Nike

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

CSR in relation to stakeholders

A

Is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

6 ways to implement CSR

A

Reduce Climate Change
Reduce negative environmental impact
Positive regard for humans right in employment
Positive links with community
Using sustainable resources
Ethical trading policies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Advantages of CSR

A

Customers more loyal to a CSR business

Staff more motivated and productive as they are proud for who they work for

Trusted relationships built with the local communities

Reduced costs as higher staff retention and energy saving

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Disadvantages of CSR

A

Many business writers speculate CSR is just a trend that will blow over and soon consumers will demand something else

Do consumers care about the background of a product or will they jus purchase the more aesthetically pleasing one

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Stakeholder

A

A stakeholder is anyone who has an interest in the business, or who may be affected by the activities of the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Shareholder

A

A shareholder is a person, business or organisation that owns shares of a company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Internal Stakeholders

A

Employee
Owners
Managers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

What is an employees interest in a business

A

Concerned with wages and job security

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

What is an owners interest in a business

A

Are concerned with strategy and profits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

What is a managers interest in a business

A

Are concerned with budgets, promotion and bonuses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

External Stakeholders

A

Customers
Community Groups
Unions
Suppliers
Competitors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

What is a customers interest in a business

A

Interested in product availability, prices and discounts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

What is community group’s interest in a business

A

Interested in the effect on locals when opening a store

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

What is a union’s interest in a business

A

Interested in pay rates and worker’s rights

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

What is a competitors interest in a business

A

Interested in market share, market size, promotions and customer loyalty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Stakeholder Mapping Steps

A

Step 1: Identify the stakeholders of the business, these should be internal and external

Step 2: Rank the stakeholder’s power either low, medium or high

Step 3: Rank the stakeholder’s level of interest in the business; low medium or high

Step 4: Rank the stakeholders value to the business; low, medium or high

Step 5,6 and 7: plot the different stakeholders on the quadrant

Step 8: the way how the business interacts with the stakeholder will depend on what quadrant you put them

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Stakeholder Mapping Quadrants

A

A: Stakeholders in this quadrant require minimal effort, and can be contacted using newsletters, mail shots and information on the company website

B: Stakeholders should be kept informed of corporate decisions and could be a potential supporter of the business in the future

C: Stakeholders should be kept satisfied, any communication should be to try to increase the level of interest in the business

D: Stakeholders in this quadrant are key players in the business and should be very involved in the governance and decision making and should be engaged with regularly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

Possible conflicts between customer and business

A

May lower prices whereas business may want to raise them

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

Possible conflicts between supplier and business

A

May demand high prices for supplies however the business may want lower prices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

Possible conflicts between unions and business

A

Looking for good working conditions and good pay however business may want to cut wages to increase profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Possible conflicts between employee and business

A

May demand for pay and job security however business may be looking for more temporary contracts to cut costs

54
Q

Possible conflicts between manager and business

A

May want budgets and promotion however business may recruit externally to bring in fresh ideas

55
Q

Possible conflicts between competitors and business

A

Board may want to continue opening stores however other stores see them as a threat

56
Q

Corporate Culture

A

A company culture is the norms and values of a business

57
Q

Strong Culture

A

Strong culture is a culture which develops good communication and core values which stem from the traditions and of the founders of the business and their history

Eg.IKEA and Google

58
Q

Weak Culture

A

A weak culture is now which breeds failure and poor characteristics eg poor managements, demotivation and failure.

Eg Amazon and Ryanair

59
Q

Charles Handy’s 4 main company cultures

A

Power Culture
Role Culture
Task Culture
Person Culture

60
Q

Power Culture

A

Represented by a spider on a web which symbolises a very strong owner or manager at the heart of the business. There is a central figure that will make decisions and there is competitive attitude amongst employees to gain power

61
Q

Role Culture

A

Represented by a drawing of a bank or Greek temple. This symbolises bureaucracy, red tape and paperwork systems in this very rigid organisation eg The Civil Service

62
Q

Task Culture

A

Is represented by a matrix of grid diagram. This symbolises a series of work teams in a large organisation eg Marketing branch may all work together on a marketing task

63
Q

Person Culture

A

Represented by a petri dish or a circle filled with smaller circles. This symbolises employees in an organisation that are all autonomous, skilled individuals. Eg web designers, lawyers and doctors who work on a client by client basis

64
Q

How is corporate culture formed

A

Heroes/Founders
Language
Mottos
Norms
Nature of the business and the product it sells
The business environment when it started

65
Q

Difficulties in changing an established culture

A

Set of goals
Roles
Communications practices
Attitudes

66
Q

Corporate Strategy

A

The overall scope and direction of a business and the way in which its various business operations work together to achieve particular goals

67
Q

Igor Ansoff

A

Coined the Ansoff’s Matrix. Which is a strategy which allows a business to analyse the opportunities and risks involved in relation to a product or service in an existing or new market with a new or existing product

68
Q

Ansoff’s Matrix

A

Has 2 Axis on the x and y:

Existing product or service
New product or service
Existing market
New market

69
Q

4 Ansoff Matrix Strategies

A

Market Penetration (low risk)
Market Development (moderate risk)
Product or Service Development (moderate risk)
Diversification (high risk)

70
Q

Market Penetration

A

Existing Product or Service + Existing Market

Increased sales to the existing market to penetrate it more deeply. Sell more to the same customers and encourage them to buy more often eg Loyalty Cards, Saver Schemes and BOGOF

71
Q

Market Development

A

Existing Product or Service + New Market

Existing product or service sold to new markets eg colouring books sold to adults

72
Q

Product or Service Development

A

New product or service + existing market

New product or service developed for existing market eg R&D of new products to sell to your existing customers

73
Q

Diversification

A

New product or service + New market

New product or service sold in new markets known as a Conglomerate

74
Q

Uses of Ansoff’s Matrix

A

Helps a business identify objectives and strategies

Highlight opportunities, risks, benefits and drawbacks of a business decision

75
Q

Limitations of Ansoff’s Matrix

A

It oversimplifies the market

Large MNCs may need thousands of sub options and strategies

76
Q

Porter’s Strategic Matrix

A

Is a strategy matrix which suggests there are 3 generic business strategies that would get competitive advantage:
Cost Leadership
Differentiation
Focus

77
Q

Cost Leadership

A

Making products at the lowest cost, may include outsourcing and lean management

Useful in highly competitive markets where there are homogenous products

78
Q

Differentiation

A

The product or service is unique and the USP adds value to the product

Useful in markets with rapid changing features of products and services and customers needs are very diverse

79
Q

Cost Focus

A

Where a business offers a low price to a small market segment. Niche marketing but at very low cost

80
Q

Differentiation Focus

A

When a business wants to offer products and services to a small market segment

Products will be differentiated and aimed at a niche market

81
Q

Uses of Porter’s Strategic Matrix

A

It established a clear direction for the business

Identified when a business may get into trouble eg “getting stuck in the middle”

82
Q

Limitations of Porter’s Strategic Matrix

A

Not relevant in dynamic markets

May not be useful in a crisis or a moment of urgency

83
Q

SWOT

A

Strength
Weakness
Opportunity
Threat

84
Q

What can opportunities arise from

A

Change in technology and markets
Change in social patterns, population, lifestyle changes

85
Q

What is SWOT used for

A

Can be used as a tool to formulate a strategy of growth

Can be used as a tool to compete and defend by minimising market threats

Can be used as a tool to improve and attack markets or coin new products

Can be used to identify change and retreat

86
Q

External Influence

A

An external influence is any factor outside of the business that has an impact on normal trading

87
Q

PESTLE

A

Political
Economic
Social
Technological
Legal
Environmental

88
Q

Political

A

A change in government
Government laws
Tax rates

89
Q

Economic

A

Increase in interest rates
Inflation
Unemployment

90
Q

Social

A

Change in demographics
Culture mix changes
Social trends

91
Q

Technological

A

Automation
Innovations in the industry
Research and development in the industry

92
Q

Legal

A

Health and safety at work
Sales of Goods act
Sex discrimination act
Minimum wage

93
Q

Environmental

A

Climate change
Weather
Sustainable production and CSR

94
Q

Porter’s 5 Forces

A

In 1985 Porter argued that there were 5 forces (or factors) which determine the profitability of an industry.

Bargaining powers of suppliers
Bargaining powers of customers
Threat of new entrants
Threat of substitutes
Rivalry amongst existing firms in the industry

95
Q

Business Growth

A

Business growth is the point at which a business needs to expand and seeks options to generate more profits

96
Q

Objectives of growth

A

To achieve economies of scale
Increased market power over customers and suppliers
Increased market share and brand recognition
Increased profitability

97
Q

To achieve economies of scale

A

Growth enables a business to benefit from economies of scale through the impact on cost of production. If production is cheaper because average costs have fallen then they can increase profit margins or reduce prices to gain more market share

98
Q

Benefits of economies of scale

A

Can benefit from bulk buying. This gives them the ability to:
-Have more purchasing power
-Have more funds to pay for specialist staff
-By having a better reputation so banks are willing to lend

99
Q

Economies of scale and average costs

A

EOS occur when unit costs or average costs fall as a result as an increase in the level of output of the business

100
Q

Cost of production equation

A

Variable costs x output + fixed costs

101
Q

Cost per unit equation

A

Total costs/ output

102
Q

Types of economies of scale

A

Financial
Marketing
Technical
Managerial
Risk-Bearing

103
Q

Financial Economies of Scale

A

Large firms can benefit from cheaper loans and wider sources of cheap finance

104
Q

Marketing of Economies of Scale

A

Large firms can attract specialist buyers who don’t waste money buying stock that won’t sell. They also benefit from specialist sellers/marketing staff who ensure goods will sell

105
Q

Technical economies of scale

A

Advantages that revolve around production, productivity and average costs

106
Q

Managerial Economies of Scale

A

Can attract specialist managers who are productive and efficient. That make effective business decisions and increase efficiency

107
Q

Risk-Bearing Economies of Scale

A

Where a business has a diversified product range and spread out markets to reduce risk of fall in demand

108
Q

Increased market power over customers and supplier

A

Reduce the power of suppliers and customers. This means that these stakeholders will act in any way the business wants them to

109
Q

Increased market share and brand recognition

A

In dynamics and competitive markets businesses may seek to grow to achieve increased market share

110
Q

Increased profitability

A

Where a business increases their output and their production becomes cheaper per unit

111
Q

Profit vs Profitability

A

Profit is the total sum of money that remains after all costs are paid however profitability is a measure of efficiency

112
Q

Problems arising from growth

A

Diseconomies of scale
Internal communication
Overtrading

113
Q

Diseconomies of Scale

A

.Lack of motivation through DEOS
-Reduced productivity
-Lower output per worker
-Increased unit costs

.Lack of co-ordination
-Workers may need monitoring which can add to costs. This means more managers and therefore increases costs per unit

114
Q

Overtrading

A

Causes cash flow problems as a business accepts more orders than it can cope with

115
Q

Internal Communication

A

Less effective communication means mistakes are made which results in more wastage therefore a higher average unit cost

116
Q

Merger

A

A merger is a legal deal to bring 2 businesses together under one board of directors

117
Q

Takeover

A

This is a legal deal where one larger business purchases a smaller one

118
Q

Tactical reasons for mergers and takeovers

A

Attempt to ensure increases marker share
Acess to technology,staff or intellectual property

119
Q

Strategic reasons for mergers and takeovers

A

Access to new markets
Improves distribution networks
Improved brand awareness

120
Q

Merger defined

A

A merger is when 2 businesses have agreed to join forces to make a third company

121
Q

Friendly Takeover

A

A business may be struggling with cash flow problems and invite a takeover from a stringers business known as a white knight as they come in to rescue the struggling business

122
Q

Hostile takeover

A

The board of directors will try and resist the takeover but if another business gets 51% shares they can takeover management and control

123
Q

Primary Sector

A

Businesses involved in digging, fishing, mining and raw materials

124
Q

Secondary sector

A

Businesses that are involved in manufacturing the raw materials into products

125
Q

Tertiary sector

A

Are businesses that sell goods to the customers eg Shops, Banks etc

126
Q

Horizontal Integration

A

Business operating in the same sector merge or takeover another business in the same sector

127
Q

Vertical Integration

A

Is when one business in one sector takes over or mergers with a business in another sector or part of the supply chain

128
Q

Financial risks of mergers and takeovers

A

Original purchase cost
Redundancies of duplicate staff
Cost if plans fall through and it is a poor investment

129
Q

Financial rewards of mergers and takeovers

A

Increased revenue
Economies of scale

130
Q

Short term problems of rapid growth

A

The businesses that have merged may outgrow their premises. There may not be enough space for everyone to work efficiently
-Morale of workers may drop
-Shortage of cash to meet expansion costs

131
Q

Problems of rapid growth on management pressure

A

Management may be under pressure operating reactively rather than proactively
-The quality of the products and services could drop, causing an increase in customer complaints
-May lose customers to competitors

A-Level Business (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions