Unit 4a Complete Revision + Greggs and Growth

HideShow resource information
Preview of Unit 4a Complete Revision + Greggs and Growth

First 634 words of the document:

by Sophia Abramchuk
Making Business Decisions!
Unit 4a Business Studies
4.3.1 What is a Mission Statement! Are Mission Statements useful
The mission statement of a business sets out what the main YES NO
purpose of a business is e.g. why it exists !
The mission is likely to be determined by the values of Can give stard a sense of Can just be a PR exercise,
common purpose and design to create a good
organisation (i.e. its culture)!
The aims of the business expressed in `qualitative terms'
Can increase motivation
public image
Usually impossible to prove
such as the desire to `be the best in the industry'!
They highlight the culture, values and beliefs of the business ! Can help stakeholders May be rather vague
Should be short, specific and convey to everyone the value of understand the main aim of
the brand and why it exists! the business
It will include information for all stockholders! Can inform the consumer It is impossible to sum up
A more inspirational and motivating version of a corporate aim! what a business is all about
in a few sentence
Corporate aims are broad long term ideas on how the
business should develop. Can be very vague e.g. to be !
Stakeholders and objectives
profitable/successful in the future!
An effective Mission Statement !
Stakeholder Objectives Conflict
Identifies the reason why the business exists ! Consumers Good value vs. price products! Shareholders !
Buying experience (service and Managers !
A good mission statement will help to develop SMART support)! Employees
corporate objectives, and be supported and adhered to in all Safe Product
levels of the business! Shareholders Maximisation of profits and return Consumers- product
Ensures that everyone is focused and working towards on investment! qualities!
Decreasing costs and improving Government- cutting taxes
achieving goals! revenues reducing costs!
Many believe that a Mission Statement should have a grand Local Community- ethics !
Employees-wages !
scale, be socially meaningful and be measurable !
A pyramid of terms!
Managers- salaries!
Suppliers- costs reduction
Suppliers Paid in time for supplies ! Managers !
Corporate objectives ! Best deals- profit maximisation ! Shareholders
Consistency !
Derived from mission statement/corporate aims! More orders !
Fair prices
General objectives that refer to the business as a whole !
Need to be practical and effective, e.g. relating to survival, Employees Good working conditions ! Shareholders- reduced
profit, market standing, social responsibility! Fair wages ! costs !
Fair treatment, motivation and Managers- reduce costs
"They are specific, measurable,r elastic and measurable rewards !
Good public image !
(SMART) goals which an organisation plans to achieve within Job satisfaction!
a given time period. These goals will influence its internal Promotion
decisions" !
Strategy !
Managers Clear objectives and guidelines
from the directors and
shareholders !
Employees !
Shareholders !
Profit maximisation for Suppliers
A plan of actions that has been designed to fulfil an objectives. shareholders !
A strategy cannot be formed until an objective has been
defined ! Government Regular tax payment ! Shareholders !
! Creation of jobs ! Managers!
Follow the legislation !
Directors !
The Local Community
! Mission
The Local
Employment !
Environment !
Shareholders !
Local conditions !
No illegal practices
Corporate objectives !
! Corporate strategy ! !
Functional objectives!
Functional strategy

Other pages in this set

Page 2

Preview of page 2

Here's a taster:

Sophia Abramchuk
Supermarket wants to open a new superstore on a
greenfield site- Local community can have the conflict with
Corporate Social Responsibility!
shareholders of the business. This is due to the interest of Social Responsibility and business ethics are not
shareholders to maximise sales and do whatever they need to the same things!
attract as many customers, without ethical considerations.…read more

Page 3

Preview of page 3

Here's a taster:

Sophia Abramchuk
Weak and Strong Culture !
Corporate culture! Weak !
Organisational culture! Employees don't support the corporate culture!
The way we do things around here- a result of tradition, Productivity and motivation likely to be low !
history and structure! Danger of `us' and `them' mentally !
The values, attitudes and believes of the people working in an Capable staff may move on, leaving disaffected discontent
organisation that control the way they interact with each other staff behind !
and with external stakeholder groups…read more

Page 4

Preview of page 4

Here's a taster:

Sophia Abramchuk
Focus on market share and market growth ignores other
Corporate Strategy !
Once the corporate objectives have been decided, a busies
issues such as developing a sustainable competitive
Useful when comparing with the product life cycle !
must begin to plan how they will be achieved !
What is Corporate Strategy?!
Long term plan to achieve corporate objectives!
Can be implemented in a number of ways e.g.!
Entering/leaving certain markets!
Acquiring new companies!
Introducing/phasing out products and services etc.…read more

Page 5

Preview of page 5

Here's a taster:

Sophia Abramchuk
Porter's 5 Forces Analysis ! Threat of New Entrants!
If businesses can easily come into an industry and leave it
again if profits are low, it becomes difficult for existing
businesses in the industry to charge high prices and make
high profits!
Existing businesses are constantly under threat that is their
profits rise too much, this will attract new suppliers into the
market who will undercut their prices.!
Businesses can counteract this by creating barriers to entry
e.g.…read more

Page 6

Preview of page 6

Here's a taster:

Sophia Abramchuk
Porter's Generic Strategies! Competition vs co-operation!
3 generic strategies that businesses could follow in order to Competition!
gain a competitive advantage.! Traditional way ­ compete and maintain a competitive
Globalisation/trade liberalisation ­ more competition!
Internet ­ increases competitive pressure!
Corporate strategy more difficult as level of competition and
speed of change increase!
Strategic decisions need to be flexible in order to cope with
competitive threats !
Factors which may persuade a business to co-operate:!
Avoid the pressures of competition (e.g.…read more

Page 7

Preview of page 7

Here's a taster:

Sophia Abramchuk
Diversification !
4.3.2 Making strategic decisions ! Developing a new product in a new market. This is the most
Ansoff's Matrix! risky strategy but can also lead to the most extraordinary
Ansoff's Matrix is a ways of classifying marketing strategies in success.…read more

Page 8

Preview of page 8

Here's a taster:

Sophia Abramchuk
Average Rate of Return!
Investment Appraisal ! This method calculates the expected annual return from the
The importance of investment ! investment, expressed as a percentage of the capital invested
Investment in capital (e.g. medium to long term assets) in the project.…read more

Page 9

Preview of page 9

Here's a taster:

Sophia Abramchuk
Steps to calculate NPV!
Decision Tree!
The `tree' is a diagram that compares all possible outcomes of
multi-stage decisions!
In order to make a decision it is necessary to calculate
the expected value (EV) of every decision- this considers
the estimated value and probability of each event !
To calculate the expected value using a diagram- work
backwards from right to left; subtract the original cost of each
option !
The option with the highest expected value would normally be
chosen !
Advantages!…read more

Page 10

Preview of page 10

Here's a taster:

Sophia Abramchuk
Working capital control: identifying when resources will be
Critical Path Analysis !
CPA is a planning tool- not a decision making tool !
required can help a business to manage its working capital
cycle. Especially important if a business operated in a just in
" A method of organising the activities in a project to find the
most efficient method of completing the project without
time system of stock control. !
wasting resources (time, money, materials.…read more



Awesome notes thank you!!!!

Similar Business Studies resources:

See all Business Studies resources »See all resources »