Theme Three - Business objectives and strategy

  • Created by: Rachelcfx
  • Created on: 26-03-19 21:47
Business aims
Long-term intentions that describe the fundamental purpose of an organisation
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Mission statement
Short sentence/paragraph to explain simply the aims of the business and why it exists
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Corporate objectives
Well defined, realistic and measurable goal set by a company that often influences its internal strategic decisions
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Corporate objectives should be SMART, what does this stand for?
Specific, Measurable, Achievable, Relevant, Time-bound
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Corporate strategy
The direction and scope of an organisation over the long term. Achieves advantage through its configuration of resources within a challenging environment, to meet the needs of markets and fulfil stakeholder expectations.
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What does Ansoff's matrix do?
Helps businesses analyse a range of possible options by considering their relative risks. The options relate to the product portfolio and possible new markets.
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What are the four options of Ansoff's matrix?
Market penetration, market development, product development, diversification
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What were porters two identified competitive strategies and what did they mean?
Competitive advantage (whether the product was high or low cost), competitive scope (whether the target market was a broad or niche market)
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What were the four subtitles in Porters Strategic Mix?
Cost leadership, differentiation, cost focus, differentiation focus
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Portfolio analysis
A business considers each of its individual products in the context of the market situation. The potential of each is addressed by its profitability, market position and distinctive features.
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Boston Matrix
Helps businesses organise their product portfolios in terms of whether the product market is actually growing and the amount of that market controlled by the firm. (market growth vs market share)
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What are the four categories in the Boston Matrix and what are the appropriate strategies for these?
Star (HOLD), problem child (BUILD), cash cow (HARVEST), dog (DIVEST)
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What are the three distinctive relationship capabilities to achieve competitive advantage?
Architecture, reputation, innovation
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Distinctive capabilities
The ideas and resources that contribute to competitive advantage. Taken together they provide a noticeable difference to the customer experience that competitors cannot easily copy.
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Strategic decisions
Reflect the long term objectives of the whole company. Require considerable expertise and will usually result from a period of serious thinking about current and future circumstances.
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Tactical decisions
Made to meet short term objectives. Contributes to the strategic plan of the organisation. Also reflects a need to respond to unforeseen opportunities and threats.
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What does SWOT stand for?
Strengths, Weaknesses, Opportunities, Threats
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SWOT analysis
Involves the assessment of a product or organisation in terms of its strengths, weaknesses (internal), opportunities and threats (external). Allows the business to address current issues and point the way toward future developments.
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What does PESTLE stand for?
Political, economic, social, technical, legal, environmental
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PESTLE analysis
Identifies external factors that could affect the business but are actually beyond its control.
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Direct competitors
In a healthy market with lots of competition a business will have direct rivals who produce very similar products or services. A consumer can choose between them.
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Indirect competitors
Are not directly in the same type of business but they are competing for the same consumer spending power. (if a customer buys one thing, they may not be able to afford to buy another thing)
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What are the pricing impact differences between competitive markets and monopolists?
Competitive market prices will have to be very similar, charging a higher price will mean selling none. Monopolists will be able to choose the price.
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What are porters five forces?
Rivalry amongst existing competitors (threat of new entrants, threat of substitute products, bargaining power of suppliers, bargaining power of buyers)
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What does porters five forces look at?
How constant change effects a business, helping it to understand both the strength of the current competitive position, and the strength of a position it might consider in the future.
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Other cards in this set

Card 2

Front

Mission statement

Back

Short sentence/paragraph to explain simply the aims of the business and why it exists

Card 3

Front

Corporate objectives

Back

Preview of the front of card 3

Card 4

Front

Corporate objectives should be SMART, what does this stand for?

Back

Preview of the front of card 4

Card 5

Front

Corporate strategy

Back

Preview of the front of card 5
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