theme 3 objectives and strategy Flashcards
what is a mission statement
is to inform stakeholders of main purpose of a business this could be the businesses aim and objectives
advantages of mission statement
can give staff a sense of shared purpose so they may work together and coordinate in order to achieve the purpose
Mission statements send out a powerful message to the general public. this may create a usp for the business if customers finds out that the business focuses on fair trade and ethics
disadvantage of mission statement
the use is limited as it dosent go into detail on how the aims
would be achieved such as tactics and strategies are not listed
a company could easily lie
Mission statements can be too vague and the information is not measurable.
why should objectives be aligned with the mission statement
objectives should be aligned with the mission statement so that the business does not lose credibilty with its stakeholders
what is a strategy
a long term plan of action that a business is willing to take
what is market penetration
trying to increase market share in your own existing market
this could be through pricing strategies, promotion, advertising
this works best in a growing market and not a saturated one
product development
selling new product in existing market
this is good when a business has comptetive advantage
and has high market share
market development
existing product to new market
a business might focus on a different market segment
and use different channel of distribution
a business needs to research the target market and adapt its product to fit the needs of the new set of customers
diversification
new product new market
ansoff matrix advantages
helps a business make a decision to what to do with there products
forces managers to think about expected risks arising when moving in that direction
ansoff matrix disadvantage
doesn’t take into account what the competitors are doing
and how they may react
only useful for small and medium size businesses
as large businesses would have a product or working in the all four quadrant already
could be difficult to predict as you could never predict the market and consumer behaviour with 100 percent accuracy
what is porters model
poters model is made up of three things differentiation
cost leadership and focus
cost leadership is making the cost of production as low as it can be
focus is concentrating on niche market and either minimising
cost or showing differentiation
what is a swot analysis and why is it used and advantages
swot analysis = strength weakness opportunity and threat
swot analysis helps a business make tactical decisions
by considering the circumstance of the business
swot analysis advantage
can be redone taking into account changing conditions such as
as economic such as changing economy
also lets a business know that it has a competitive advantage over rivals
explain all pestle factors
political = government could introduce low corporation tax
to encourage small businesses
technological = businesses would buy new technology to improve efficiency and also do things which they werent able to do before it would be harder for small businesses to purchase they items
