topic 7 (stragetic possition)

Question 1

mission statements are

Answer 1

a statement of an organisation’s general purpose and reasons for existence

Question 2

corporate aims are

Answer 2

long-term targets set to allow a business to develop and achieve its mission

Question 3

corperate objectives are

Answer 3

quantifiable SMART (specific, measurable, achievable, realistic, time) goals or targets hat give the business direction and focus

Question 4

green washing is when ?

Answer 4

a company tries to make themselves look environmentally friendly

Question 5

external influences on Corporate objectives and decisions

Answer 5

The state of the economy
Rivals actions

Question 6

internal infulences on Corporate objectives and decisions

Answer 6

The company’s current finical position
New leadership

Question 7

stratergy is

Answer 7

long term, involves whole business, decided by senior management to achieve the mission by attaining its corporate objectives

Question 8

tatatics are

Answer 8

short term everyday actions completed by individuals lower down so don’t involve whole business, they carry out firms’ strategy towards achieving its objectives

Question 9

Influences on the mission of a business

Answer 9

• The views, beliefs and values of the company founder
• The industry the firm operates in
• The product or service they produce
• Societal views, values, trends and customer expectations
• Target audience/ existing market structure and competition

Question 10

strategic decison making

Answer 10

decisions made at corporate, senior management or executive level

Question 11

functional decsion making

Answer 11

decisions made at function, department or division level.

Question 12

SWOT analysis is

Answer 12

SWOT analysis is a technique that allows an organisation to assess its overall position
It’s a method of analysing the current situation by examining the internal strengths and weaknesses of the business and the external opportunity and threats.

Question 13

the S is SWOT means

Answer 13

Strengths – things that a business is good at

Question 14

the W is SWOT means

Answer 14

weaknesses – areas that a business has weaknesses in

Question 15

the O is SWOT means

Answer 15

Opportunities – what is happening in the market that the firm would want to be involved in that could be a source of future success

Question 16

the T is SWOT means

Answer 16

Threats – anything that will negatively impact a firms performance or constrain their actions in the external environment

Question 17

current ratio -

Answer 17

short term liquidity (current assets : current liabilities)

Question 18

gearing ratio looks into a ?

Answer 18

a firms reliance on borrowing and what proportion of capital invested has come back from bank loans

Question 19

gearing ratio calcualtion

Answer 19

non-current liabilities/total equity +non-current liabilities x 100

Question 20

benifits of high gearning for firm

Answer 20

• There will be less need to raise finance through share capital when bank loans are used, so there will be less shareholders making it easier to keep control of the company and make long term strategic decisions
• Less dividend payments will be required as share capital will not be needed so when the firm makes high profit there will be more retained profit for reinvestments

Question 21

benifits of low gearing

Answer 21

• It makes the business more attractive investment to potential shareholders
• The firm will not be as vulnerable to the cost impacts of interest rate changes
• There is reduced risk as the business has less debt and fewer creditors who could but the business into liquidation if these debts go unpaid

Question 22

you can analysing operations data by looking at?

Answer 22

• Productivity: the average output per worker or piece of capital equipment. Higher productivity increases a firm’s efficiency and gets the most value from its costs
• Unit costs: the average cost of making each unit. As a firm grows in size it can spread its total cost over a large number of units to benefit from economies of scale.
• Quality levels: the quality of product/service will be vital in developing a strong brand image and developing customer satisfaction

Question 23

payback calculation

Answer 23

income required/income gernergated next year x 12

Question 24

average rate of return calcualtion

Answer 24

average annual profit from investment/ capital of investment

Question 25

net present value =

Answer 25

predicted present value - initial cost