Business Theme 3 (Edexcel) A Level

all key details on theme 3 business (2016 - 2017) New course

  • Created by: muniira
  • Created on: 14-11-16 12:33

1.1 Corporate objectives

Definitions

Aim: A generalised statement of where a business is heading

Mission: An aim expressed in a particularly inspiring way.

Mission statement: A statement that sums up a firm's mission that is shared throughout the organisation

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1.2 Corporate Strategy

Corporate strategy : a medium-to-long term plan for meeting company-wide objectives

Porter's Generic Competitive Strategies (ways of competing): Porter called the generic strategies "Cost Leadership" (no frills), "Differentiation" (creating uniquely desirable products and services) and "Focus" (offering a specialized service in a niche market).

He then subdivided the Focus strategy into two parts: "Cost Focus" and "Differentiation Focus."  

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1.2 Corporate strategy 2

Key definitions

Distinctive Capabilities: Ways a firm operates that cannot easily be copied by rivals.

Economies of Scale: Factors that cause average costs to fall as output increases. 

Generic Strategy: A strategy position that will prove effective in every market (e.g. lowest cost, high differentiation) .

Product Differentiation: The extent to which consumers perceive one product as being different from its rivals .

Stock Units:The number of different brands and pack sizes stocked by a company.

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3.1 Ansoffs Matrix

The Ansoff Growth matrix is another marketing planning tool that helps a business determine its product and market growth strategy.

Market penetration - Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets.

Market development - Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets

Product development - Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets

Diversification - Diversification is the name given to the growth strategy where a business markets new products in new markets.

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4.1 SWOT Analysis

SWOT Analysis investigates a company's strengths and weaknesses and uses them to help foresee future oppurtunities and threats.

Image result for swot analysis diagram

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5.1 Impact on External influences

External influnce is a factor beyond a firm's contol that can effect its performance. Examples include; changes in customer tastes, laws and regulations and economic factors such as the level of spending in the economy as a whole. We can use PESTLE, which stands for;

    • Political
    • Economical
    • Social
    • Technological
    • Legal
    • Environment
  • Political - current and future legislations, govenrment funding/grants/policies, international pressure and wars and conflict.
  • Economical - taxations, market/trade cycles, distribution trends, interest rates, exchange rates,international trade and monetary issues.
  • Social - lifestyle trends, demographic, customer attitudes/opinions, media, ads, religious, brand,company and events.
  • Technological - technologies, legislations, innovation
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6.1 The Competive Environment

Competiveness measures the firms ability to shine in comparison with its rivals.

Threat of new entry;

  • time and cost of entry
  • specailst knowlegde
  • economies of scale
  • cost advantages
  • techonology protection
  • barriers to entry

Competitive rivarly;

  • number of competitiors
  • quality differences /other differences
  • swithching costs
  • customer loyalty

 

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6.1 The competitive environment

Suppliers power;

  • number of supilers /size of suppliers
  • uniqueness of service
  • your ability to subsitiutes
  • cost of changing

Buyers power;

  • number of customers
  • size of each order
  • differences between competitiors
  • price sensitivity
  • ability to subustitutes / cost of changing

Threats of subtitution;

  • subtititues performance
  • cost of change.
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7.1 Growth

Growth means expansion, either due to rising sales or by increasing the scale of an enterprise by means of a takeover.

Why firms grow; to increase..

  • profits , market share, market power, profitablilty and to achieve economies of scale.

Economies of scale - factors that cause avaerage costs to fall as the scale of output increases.

Diseconomies of scale - factors that cause avaerage costs to rise as the scale of output increases.

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