A generalised statement of where the business is heading
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What is a mission statement?
An attempt to put corporate aims into words that inspire
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What are the issues with mission statements?
They might replace the real thing
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What does corporate strategy do?
Provides a medium-to long-term plan for meeting company-wide objectives
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What are the benefits of using Porter's low-cost strategy?
You can charge the lowest prices or have higher profits
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What is the benefit of using Porter's differentiation strategy?
Higher prices can be charged as there is added value
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What management style does Porter recommend when using the focused low cost strategy?
Very flat. Almost entirely delegated
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What is the benefit of using focused differentiation?
It is the most sustainable competitive position
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What is the aim of a portfolio analysis?
Help the decision making process
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How can a business achieve competitive advantage through distinctive capabilities?
If there is a highly talented research team the business can differentiate. Or the company can learn from mistakes and keep moving forward
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What are tactical decisions?
Short-term responses to opportunities or threats
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How can a strategic decision effect human resources?
Often accompanied with painful career decisions (and/or redundancies)
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How can a tactical decision effect human resources?
May create a great deal of work in the short-term, unlikely to effect careers
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How can strategic decisions effect physical resources?
Can result in large store closures or cancellations in opening new ones
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How can tactical decisions effect physical resources?
Might involve a temporary hire in extra equipment
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How can strategic decisions effect financial resources?
Very expensive and more costs can arise whilst the plan is going ahead
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How can tactical decisions effect financial resources?
Unlikely to have a massive impact on companies finances
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What is the key to finding the right strategic direction?
Strategy must be achievable and company specific
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What is market penetration?
Increasing market share by concentrating on existing products in existing markets
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How do opportunities for market penetration arise?
Finding new customers, taking customers from competitors, persuading existing customers to increase usage
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What is market development?
Finding new markets for existing products
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How can market development be carried out?
Repositioning the product (targetting a new segment). Moving into a new market
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What is product development?
Launching new products into your existing market
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How can companies do product development?
Change an existing product. Develop a new product
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What is diversification?
Entering a new product into a new market
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What is a SWOT analysis?
It investigates a company's current Strengths, Weaknesses and uses them to help foresee future Opportunities and Threats
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How can you measure a companies strengths and weaknesses?
Like-for-like sales (compares sales from the last year), market share and capacity utilisation
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How can you measure a companies potential opportunities and threats?
Demography, new laws, technological factors, commodity prices, economic factors
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What does PESTLE stand for?
political, economic, social, technological, legal and environmental
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What are the big factors leading to a changing competitive environment?
Shortening product life cycles, more rapid changes in consumer tastes, globalisation, tougher profit pressures on companies
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What was the aim of Porter's five forces?
Help businesses work out how to achieve and sustain a competitive advantage
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What are the five forces determined by Porter?
Rivalry amongst existing competitors, threat of new entrants, changes in the buying power of consumers, changes in the selling power of suppliers, threat of substitutes
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Other cards in this set
Card 2
Front
What is a mission statement?
Back
An attempt to put corporate aims into words that inspire
Card 3
Front
What are the issues with mission statements?
Back
Card 4
Front
What does corporate strategy do?
Back
Card 5
Front
What are the benefits of using Porter's low-cost strategy?
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