Unit 7 - Analysing The Strategic Position Of A Business Flashcards
A mission statement
Sets out a business’s overall purpose to direct and stimulate the entire organisation
A vision statement
Sets out a business’s aspirations for the future
Corporate objectives
are medium to long-term goals established to co-ordinate the business.
Strategic decisions
are judgements made by senior managers that are long term,
involve a major commitment of resources and are difficult to reverse.
Shareholders returns
are the financial benefits derived by shareholders from buying a
company’s shares and are the combination of an appreciating share price and dividends paid.
Dividends
are the part of a company’s profits that are paid to shareholders in
proportion to the number of shares that they own.
Short-termism
is the pressure to deliver quick results to the
potential detriment of the longer term development of the company.
Culture
encompasses the values, attitudes and beliefs of those who work for a business.
Strategy
is the long-term plan to achieve the business’s vision through attaining its corporate
objectives.
Tactics
are short-term decisions, usually involving relatively few
resources, that are made to implement a strategy.
A functional decision
is a judgement taken by managers responsible for one aspect of
a business’s activities, such as marketing or H.R.
SWOT analysis
is a management technique used to identify a business’s strengths and
weaknesses, as well as the opportunities and threats to which it will be exposed.
A consolidated balance sheet
is the total balance sheet for a business, including all its divisions.
Assets
are items owned by a business, such as cash in the bank, vehicles and property.
Liabilities
represent money owed by a business to individuals,
suppliers, financial institutions and shareholders
A statement of financial position
is an alternative name for the balance sheet which was introduced in 2009, but is only used by some businesses currently.
Capital
is the money invested into a business and is used to purchase a range of
assets including machinery and inventory
Working capital
is current assets minus current liabilities.
Depreciation
is the reduction in the value of an asset over a
period of time.
Profit
is the surplus of total revenue over total costs for a business over a trading period.
A loss
is a situation where a business’s expenditure exceeds its revenue over a specific trading period.
Window dressing
is the preparation of financial statements to present the company’s performance in the best possible light.
Ratio analysis
is a technique for analysing a business’s financial performance by
comparing one piece of accounting information with another.
Profitability
is a measure of financial performance that compares a business’s profits
to some other factors such as revenue.
A profit margin
is a ratio that expresses a business’s profit as a percentage of its
revenue over some trading period
Productivity
measures the quantity of inputs required to produce
a unit of output.
Unit costs
measure the cost per unit of output produced.
Capacity utilisation
measures the existing output over a given
period as a percentage of the maximum output.
Absenteeism
occurs when a employee is not present at his or her place of work.
Labour turnover
is the percentage of a business’s employees who leave the business over some period of time (normally a year).
Labour (employee retention)
is the extent to which a business holds onto its employees.
Core competencies
are the unique abilities that a business possesses that provide it with
competitive advantage.
Competitive advantage
is a superiority that a business possess over its rivals that may
allow it to achieve objectives, such as increased market share or profitability.
Research and development (R&D)
is the generation and application of scientific knowledge to create a new product or develop a new production process which can increase the
business’s productive efficiency.
Profit quality
measures the extent to which a particular type of profit is sustainable.
Employee engageme
describes the connection between a business’s employees and
its mission, goals and objectives.
Brand
is a ‘promise of an experience’ and conveys to consumers a
certain assurance as to the nature of the product or service they will receive.
The balanced scorecard
is a planning and management strategy designed to match business activities to the aspirations set out in the organisations vision statement.
Social responsibility
is managing a business so as to take into account the interests of society in general and especially those groups and individuals with a direct interest in the business.
Fair trade
is a social movement that exists to promote improved trading terms and living conditions for producers of products in less-developed countries.
Sustainable production
occurs when the supply of a product does not impose costs on the
future generations by, for example, depleting non-renewable resources.
Enterprise
Is the skill needed to make a new idea work
Innovation
Is the successful exploitation of new ideas
Globalisation
Refers to the increasing trade between countries and the growing internationalisation of businesses
Regulation
Is the enforcement of principles or rules that results from the passing of a law or a series of laws
Financial services
Are any products which are financial in nature and include those supplied by banks, insurance companies and financial advisors
Privatisation
Is the process under which the state sells business that it has previously owned and managed to private individuals and businesses
Monopoly
Exists when there is a single supplier within a market
Infrastructure
Refers to the physical and organisational structure required to allow both society and an economy to operate effectively, e.g. transport and communication networks
Cartels
Exist when two or more business collide to control prices and/or production levels to limit the extent of competition within a market
Anticompetitive practices
Are actions taken by businesses to limit the extent of rivalry that exists within a particular market, or the use of unfair trading activities
Dominant market position
Is a position of economic strength enjoyed by a business which enables it to prevent effective competition being maintained within a market
Merger
Is the joining together of two business to form a new, larger enterprise
Takeover
Occurs when one Company acquires control of another by buying more than 50% of its share capital
Trade union
Is an organisation of workers established to protect and improve the economic position and working condition all’s of its members
Collective bargaining
Entails negotiations between management and employees representatives, often trade unions over pay and other conditions of employment
Gross domestic product (GDP)
Measures the value of a country’s total output of goods and services over a period of time, normally one year
Recession
Is a period of at least 6months or 2 quarters during which an economy’s gdp falls
A currency
Is the system of money in general use in particular country, for example in the uk the currency is pound sterling (£). The value of a currency. Can rise and fall against other countries
An exchange rate
Is the price of one currency expressed in terms of another, for example £1 = $1.25
Inflation
Is a persistent rise in the general price level and associated fall in the value of the money
Consumer price index (CPI)
measures the rate of inflation based on changes in prices of a basket of goods and services
Deflation
Is the rate of decrease of the general price level and the corresponding rise in the value of money
Taxation
Is a payment that has to be made to the government or other authority by households, firms or other organisations
Budget balance
Is the difference e between government spending and revenue over the financial year
Fiscal policy
Is the use of taxation and public expenditures to manage the level of economic activity
Monetary policy
Is controlling the amount of money and or interest rates within the economy in order to achieve the desired level of economic activity
Interest rates
are the price of borrowed money
Protectionism
Is a government policy which favours the use of measures intended to prevent the free entry of imports into a country
Global strategy
Exists when a business produces a single product (possibly with slight variations) to meet the needs of consumers across the global market
Emerging market (or economy)
Describes a country with low incomes per head but one which is enjoying high rates of economic growth
Economic growth
Is the rate of increase in the size of a n economy over time
BRIC Countries
Brazil, Russia, India and China (BRIC) are often referred to as prime examples of emerging g markets
Multinational business
Is one that has production capacity in more than one country
Demography
Is the study of human populations
Demographic factors
Are factors related to the population
Migration
Is the movement of people between countries or regions
Urbanisation
Is the movement of people from countryside to live in cities
Corporate social responsibility
Refers to the extent to which a business takes into account its stakeholders views and accepts its obligations to society over and above the legal requirements
Stakeholders
Are individuals or groups (such as employees,customers and local residents) who have an interest in a business
A pressure group
Is a group of people with common interest who organise to influence public opinion and the decisions of businesses and governments
Ethics
Are moral principles that can shape the way a business behaves
Corporate social reports
Are documents setting out a business’s targets for meeting its social obligations and the extent to which previous social targets have been achieved
Cloud computing
Involves the centralise storage of sag in remote servers and online access by users worldwide on internet connected devices
Computer aided design
Is a combination of hardware and software that allows businesses to create, modify and adapt plans for new products
Computer aided manufacturing
Is the use of machines controlled by computers as part of a production process
Data analytics
Is the process of investigating raw data with the intention of drawing conclusions front the information
Investment appraisal
Is a series of techniques designed to assist businesses in judging the desirability of investing in particular projects
Present value
Is the value of a future stream of income from an investment, converted into its current worth
Discounting
Is the process of reducing the value of future income to reflect the opportunity cost of an investment
