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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…

Page 2

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by 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…

Page 3

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by 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…

Page 4

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by 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
advantage!
Useful when comparing with the product life cycle !

!
must begin to plan how they will…

Page 5

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by 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…

Page 6

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by 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
advantage!
Globalisation/trade liberalisation ­ more competition!
Internet ­ increases competitive pressure!
Corporate strategy more difficult as level of…

Page 7

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by 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. !
terms of existing and…

Page 8

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by 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.!
features;! Quantitatively ­ the higher…

Page 9

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by 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…

Page 10

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by 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…

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aarnie

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Awesome notes thank you!!!!

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