Theme 3.1.1-3.1.4

Question 1

Definition of a mission statement?

Answer 1

“Reason for existence”

Is the over-riding goal, the reason for a businesses existence and its vision for the future

Question 2

Example of a mission statement

Answer 2

“We are on the face of the earth to make great products” - Apple

Question 3

What are features of a good mission statement

Answer 3

• clear sense of business purpose
• excites, inspires, motivates and guides
• easy to understand and remember
• differentiates business from competitors
• for all stakeholders - not just shareholders and managers

Question 4

Issues with mission statements

Answer 4

• not always supported by the actions of the business
• often too vague and general
• often merely statements of the obvious
• are they just PR (public relations)?
• sometimes regarded cynically by staff
• to be effective, everyone in the business has to “buy it”
• argued that corporate and functional objectives are more important as these help achieve long term goals

Question 5

Mission and hierarchy objectives (triangle) and if they are long, medium or short term

Answer 5

• mission (long term)
• corporate objectives (medium term)
• functional objectives (short term)
• business unit/ individual targets

Question 6

Features of good corporate aims/ objectives

Answer 6

They have to be SMART:
Specific
Measurable
Achievable
Realistic
Time stamped (e.g. in the next five years)

Question 7

Benefits of a mission statement

Answer 7

• can help guide decision-making

- can help guide corporate objectives and strategy

Question 8

Aims

Answer 8

These are a generalised statement of where a business is heading, from which objectives can be set.
A mission is a more fervent, passionate way of expressing an aim.
Corporate objectives turn the aims into SMART targets, I.e. specific, measurable, ambitious, realistic and time stamped/ time bound

Question 9

Strategies

Answer 9

What actions you will take to achieve the objectives

Question 10

Business objective

Answer 10

A result that a company aims to achieve

Usually includes a time frame and lists the resources available

Question 11

Examples of business objectives

Answer 11

• increase profit
• increase market share
• survival

Question 12

Examples of business strategies (how you will achieve business objectives) if the objective is:
To increase profit

Answer 12

Reduce costs and prices

Question 13

What is a distinctive capability?

Answer 13

It is a form of competitive advantage that is sustainable as it is difficult to for other firms to replicate this

Question 14

What are three types of distinctive capability?

Answer 14

Architecture - strength of relationships within an organisation between employees, but also with suppliers
Reputation - building strong brand image
Innovation - developing new products or processes

Question 15

Strategy definition

Answer 15

Is more long term and refers to achieving an overall goal or target of business e.g. market penetration

Question 16

Tactics definition

Answer 16

Shorter-term actions that help to achieve the strategy e.g. promotion (to achieve market penetration)

Question 17

Example of a tactic

Answer 17

Promotion (to achieve market penetration)

Question 18

Example of a strategy

Answer 18

Market penetration

Question 19

Corporate strategy definition (same as aim and objective)?

Answer 19

Provides and medium-to-long-term plan for meeting company-wide objectives

Question 20

What is SWOT analysis?

Answer 20

SWOT is an analysis of the internal strengths and weaknesses of the business and opportunities and threats presented by its external environment

Question 21

Why is it important to know your businesses Strengths and Weaknesses (the SW of SWOT)?

Answer 21

It’s important so you can play to your strengths, work on your weaknesses and recruit people that have strengths that you lack

Question 22

SWOT - the external environment definition

Answer 22

Factors outside the businesses control provide opportunities and threats to a business

Question 23

Examples of opportunities and threats to a business (external environment therefore out of businesses control)

Answer 23

• demography
• economic factors
• news laws?/ regulations
• technology

Question 24

What does PESTLE stand for?

Answer 24

Political
Economic
Social
Technological
Legal
Ethical/ environmental

Question 25

What is PESTLE analysis?

Answer 25

PESTLE analysis is a framework for assessing the key features of the external, environment facing a business
It provides a useful way to analyse the overall external environment

Question 26

Examples of PESTLE factors (Political)

Answer 26

• competition policy
• industry regulation
• government spending and tax policies
• business policy and incentives