Theme 3 Flashcards
What is a corporate objective?
- corporate objectives are those that relate to the business as a whole, usually set by the top management of the business and provide the focus for setting more detailed objectives for various functions.
How do businesses develop corporate objectives from mission statements/corporate aims?
- create corporate objectives using the values of which the mission is based upon.
- create corporate objectives as smaller steps to achieve corporate aims.
what is a critical appraisal?
- the process of assessing the trustworthiness, value and relevance of a piece of information e.g. a mission statement.
what does a critical appraisal of mission statements/corporate aims involve?
- involves assessing whether the benefits of creating a mission statement outweigh the costs.
- will it be put to good use or be ignored by the majority of stakeholders.
- how will the sentiments be implemented within the org.
- will it change as the organisation changes.
What is ansoffs matrix?
- Ansoff’s matrix is a marketing planning tool that helps a business determine its product and market growth strategy.
What is porters strategic matrix?
- porters strategic matrix provides 4 generic business strategies that could be followed in order to gain a competitive advantage.
- he called the strategies cost leadership, differentiation, and focus.
- he then divided focus into two parts, cost focus and differentiation focus.
what are the 2 matrix methods of developing corporate strategy?
- ansoffs matrix
- porters matrix
What are the advantages and disadvantages of Ansoffs matrix?
+ forces management to think of expected risks of strategic plan, creating a risk aware culture.
+ lays out possible strategies for growth which can be presented to stakeholders.
- doesn’t take into account activities of external competitors.
- accurate predictions are difficult due to unforeseen events.
What are the advantages and disadvantages of Porters matrix?
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What is portfolio analysis?
- An analysis of elements of a company’s product mix to determine the optimum allocation of its resources.
What are the aims of portfolio analysis?
- to determine the optimum allocation of resources.
- to decide which products/services should be developed and which should be discontinued.
- to set objectives for individual products/services.
What is competitive advantage?
- A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.
How do distinctive capabilities allow a business to achieve competitive advantage?
- operational skills within a business such as a highly talented R&D department could lead to differentiation being a viable future.
- companies ability to learn from mistakes and success so the business is always moving forward.
- all about sticking to strengths of the business e.g. mentality, operational skills.
What impact do strategic decisions have on Human, physical and financial resources?
- strategic decisions are long term and often irreversible.
- restructuring organisation can lead to redundancies and high staff turnover.
- closure of stores will create long term impacts on physical resources.
- change in strategic direction may cause business to encounter unexpected costs having an impact on financial resources.
What impact do tactical decisions have on physical resources?
- tactical decisions are short term and can be reversed easily.
- decisions may create large amounts of work and disruption short term for staff but is unlikely to impact careers.
- hiring extra equipment to deal with demand will have short term impact on physical resources.
- tactical decisions may have a short term impact on financial resources.
What is SWOT analysis?
- a way of investigating a companies current strengths and weaknesses and using them to help force future opportunities and threats.
In SWOT analysis what internal considerations need to be considered?
- strengths and weaknesses of the business e.g. market share, capacity utilisation, revenues.
What is PESTLE and what does it stand for?
- an effective way to analyse key features of the external environment. stands for: Political Economic Social Technological Legal Ethical/environmental
How can external influences such as politics impact business strategy?
- competition policy
- industry regulation
- govt spending & tax policies.
- business policy & incentives
How can external influences such as the economy impact business strategy?
- interest rates
- consumer spending and income.
- exchange rates.
- economic growth (GDP)
How can external influences such as social trends impact business strategy?
- Demographic change
- impact of pressure groups
- consumer tastes
- changing lifestyles
How can external influences such as technology impact business strategy?
- disruptive technologies
- adoption of mobile technology
- new production processes
- big data and dynamic pricing
How can legal external influences impact business strategy?
- employment law
- minimum/living wage
- health & safety laws
- environmental legislation.
How can environmental/ethical external influences impact business strategy?
- sustainability
- tax practices
- ethical sourcing (supply chain)
- pollution & carbon emissions.