Theme 3 Business Decisions And Strategy

Question 1

mission statement/corporate objectives

Answer 1

explanation of an business reason for existence and describes its purpose, intention and overall objectives.

Question 2

mission statement

Answer 2

sets out the overriding goal of the business and the reason for its existence

Question 3

ansoff matrix

Answer 3

a strategic tool for a business with a growth objective which helps businesses choose the market they wish to operate in and the products they will sell

Question 4

Strategy

Answer 4

Long-term plan or approach that a business will take to achieve its objectives

Question 5

Tactics

Answer 5

Day-to-day decisions taken by middle managers

Question 6

SWOT analysis

Answer 6

a strategic tool that a business can use to analyse its current position and the external factors that might affect it

Question 7

Porters Five Forces

Answer 7

a model used to identify and analyze an industry’s competitive environment

Question 8

Business growth

Answer 8

is the expansion of the business in terms of growth in revenue, customer base, market share, or producing more goods

Question 9

Organic growth

Answer 9

the growth a company achieves by increasing output and enhancing sales internally (steady and gradual)

Question 10

External growth/inorganic growth

Answer 10

growth of a business using external resources and capabilities rather than from internal business activities

Question 11

Economies of scope

Answer 11

when producing a wider variety of goods and services results in unit costs decreasing

Question 12

Economies of scale

Answer 12

increasing level of output leads to decrease in costs

Question 13

Diseconomies of scale

Answer 13

unit costs rise as a business level of output increases

Question 14

Overtrading

Answer 14

when businesses grow to fast and overstretch their financial resources such as cash

Question 15

mergers

Answer 15

two businesses come together in a joint venture for mutual benefit to share strengths or for business survival

Question 16

takeover

Answer 16

when one business acquires another along with its assets

Question 17

Vertical integration

Answer 17

merger/takeover of another firm in a different stage of the production purpose

Question 18

Horizontal integration

Answer 18

merger/takeover of another firm in the same stage of the production purpose (ice cream business takeover another ice cream business)

Question 19

Forward vertical integration

Answer 19

a merger or takeover with a firm further forward in the supply chain (A dairy farmer merges with an ice cream manufacturer)

Question 20

Backward vertical integration

Answer 20

a merger/takeover with a firm further backward in the supply chain (An ice cream retailer takes over an ice cream manufacturer)

Question 21

Time series analysis

Answer 21

Time series analysis is a method that examines data points collected at regular intervals to uncover underlying patterns and trends

Question 22

Extrapolation

Answer 22

involves the use of trends established by historical data to make predictions about future values

Question 23

Investment appraisal

Answer 23

a series of techniques designed to assist businesses in judging the desirability of an investment.

Question 24

Decision trees

Answer 24

a method of tracing alternative outcomes from a range of business decisions,options or projects

Question 25

Critical path analysis

Answer 25

project management tool that uses network analysis to plan complex and time-sensitive projects

Question 26

Float time

Answer 26

the time that an activity can overrun without delaying the completing of the project as a whole

Question 27

Organisational change

Answer 27

a process in which a larger business or organisation changes its working methods in order to deal with new situations in the market

Question 28

Change management

Answer 28

a process used by companies to plan, implement, and manage change within the organization

Question 29

Transformational leadership

Answer 29

where anew leadership(new CEO) brings about change with the purpose of improving the businesses perfromance

Question 30

Scenario planning

Answer 30

the process of anticipating possible changes in a business’s situation and devising ways of dealing with them

Question 31

Business Continuity Plan

Answer 31

how a business will operate following a serious incident or disaster and how it expects to return to normal as soon as possible

Question 32

Risk mitigation plans

Answer 32

identify and assess risks and then plan responses to those risks

Question 33

Risk assessment 1

Answer 33

involves identifying potential risks that could disrupt business operations

Question 34

Impact analysis 2

Answer 34

Is the assessment of the potential impact of these events on the business

Question 35

Strategy development 3

Answer 35

Formulates the approaches to be taken to respond to disruption

Question 36

Plan development 4

Answer 36

Outlines the specific steps that will be taken in the event of a disruption

Question 37

Testing and training 5

Answer 37

Ensures that the plan is effective and all stakeholders understand their roles and responsibilities

Question 38

Maintenance and review 6

Answer 38

Involves the regular review and updating of the plan to ensure that it remains relevant and effective

Question 39

Succession Planning

Answer 39

involves identifying and developing current employees who have the potential to move into key roles in the future