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Business studies revision ­ Strategic management

Business objectives and strategy:

Objectives: Distinguishing between Tactical and Strategic objectives:

Mission statements: What is their significance?

Stakeholder-main interests

Shareholders Profit growth, Share price growth, dividends

Creditors Interest and principal to be repaid, maintain
credit ratings

Directors and managers Salary, share options, job satisfaction…

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Shareholders Want to see their profit rise however will still be
worried about risk in the business (not gaining
return through dividends)

Creditors Creditors may be weary. May not want to give
the loan to a business because of the risk

Directors and managers Concerned about location, will it…

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-Easy to be over optimistic in a business plan

-Competitor response is often aggressive

-Easy to underestimate the effort and persistence is required for success

Insufficient customer demand

-Poor market research and unrealistic plan

-Competitor response e.g. price cuts or extra promotions

Good idea but poor execution

-wrong people; poor…

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more market share (through opportunities) and where they are doing well- and thus maintain this

Advantages of a SWOT analysis Disadvantages of using a SWOT analysis

Little or no costs Doesn't prioritise issues

Understand your business better The business may not have the means
(financially) in order to address threats…

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Macro environment

Political = The effects of privatisation, workers' rights, rising competition, government influence,
political parties, pressure groups and legislation.

Environmental = Demographic or population changes, how ethics change demand for goods and
services, and reactions due to social behaviour. Geological and ecological issues include a scarcity of
raw materials,…

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Customers/consumers Force firms to adopt a more customer
orientated approach: lead to `customer care'
departments/ may influence a firms pricing
strategy and therefore businesses may adopt
more affordable prices to suit the needs of

Suppliers Want profit/ timely pay.

Government Stable economic growth, low inflation, low
unemployment and a…

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Figures fluctuate over time, especially for seasonal products and services. The trend will
smooth out these fluctuations. Establishing whether the trend is upwards or downwards will
allow the business to respond accordingly

-Cyclical fluctuations: variations related to the business cycle/economic cycle such as the recession
that has led to a…

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Limitations of forecasting:

Forecasting is only as reliable as the data

Past data will not necessarily reflect future figures, and circumstances change

This technique cannot distinguish between old and new data (the latest being most reliable

The objectives of the business are not considered hence you will need to think…

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East activity is labelled with its name eg `print brochure', or it may be given a label, such as
`D', below.
The activities on the critical path are usually marked with a `//'
In the example below
The Node is number 3
The EST for the following activities is 14…

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What is the significance of data analysis?

Data analysis can offer the following benefits:

-Structuring the findings from a survey reearch or other means of a data: form a plan after statistics
are found

-Break a macro picture into a micro one

-Acquiring meaningful insights from the data

-Basing critical…




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