Business Lecture Notes

Flashcards to help review lecture notes.

What does a mission statement set out for a business?

A business's overall purpose to direct and stimulate the entire organization.

What type of goals are corporate objectives?

Medium to long-term goals established to coordinate the business.

What do functional objectives relate to?

Objectives for a specific function in the business (e.g., operations, marketing, finance, or HR).

What are strategic decisions?

Judgments made by senior managers that are long-term, involve a major commitment of resources, and are difficult to reverse.

Define 'strategy' in a business context.

A medium to long-term plan detailing how the company intends to achieve its corporate objectives.

What do tactics involve?

Meeting short-term targets, requiring resources to implement, and may be easy to reverse.

What is SWOT analysis used for?

To identify a business's strengths and weaknesses, as well as opportunities and threats to which it will be exposed.

What does a mission statement declare?

An organization's purpose, aims, identities, policies, and values.

Define a corporate objective.

Sets out what you need to do to achieve aims and purpose.

Define 'strategy'.

A course of action which enables you to meet your objectives.

Give an example of an Apple objective.

Designing the future of mobile media by having the largest market share.

What are the two categories of influences on corporate objectives and decisions?

External and internal influences.

List the external influences on corporate objectives and decisions.

Political, economic, social, technological, and competitive environment; society's views.

List internal influences on corporate objectives and decisions.

Business ownership, short-termism, internal environment (a new leader, the business culture).

Define 'short-termism' in a business context.

When a business prioritizes short-term rather than long-term goals, usually financial factors.

What is the purpose of finance objectives?

Survival and managing cash flow.

What is the purpose of marketing objectives?

Increasing sales management and innovation

What is the purpose of human resources objectives?

Making full use of the workforce

What is one reason to use SWOT analysis?

A useful tool when examining internal & external environment, It can be used to inform decision making and Corporate objectives and strategies

Give an example of a weakness

financial constraints or a bad publicity or reputation for low quality

Define Balance Sheet

Financial statement recording assets and liabilities of a business on a particular day at the end of an accounting period.

Define Income Statement

An accounting statement showing a firm's sales revenue over a trading period and the relevant costs generated to earn that revenue. It shows the profit / loss made during that period.

Define ratio analysis

A technique For analysing a business's Financial performance by comparing one piece of accounting info with another

Define profitability.

A measure of Financial performance that compares a business's profit to some other factors such as capital employed or revenue

What do liquidity ratios allow managers to do?

They help to monitor a business's cash position by comparing current assets to current Liabilities

Define Gearing.

Analyses how firms have raised their long term capital

Define effeciency ratios

Measures the effectiveness with which management controls the internal operation of the business.

When analysing the income statement, what should you consider?

Gross profit, operating profit, profit margins, profit quality, and profit utilisation.

What is 'profit quality?

The degree to which profit is sustainable.

What is 'profit utilization'?

The way profit is used; reinvesting is known as retained profit.

Balance sheet

A document that shows the Assets, liabilities and capital on a particular date.

Define Net Assets

Total current assets Less Current liabilities

Financial stakeholders will be interested in balance sheet

but especially shareholders, suppliers Banks + employees.

The Complete measure of a business's performance

Profitability, Financial Liquidity and Gearing

What is the purpose of ratio analysis?

To identify aspects of a business's performance to aid decision-making. It is a quantitative process and therefore may need to be supplemented by qualitative factors to get a complete picture.

Income equals

Revenue-Cost of saus

Operating Profit

Income -Operating costs

Define the purpose of inter-firm comparisons.

Comparing with competitors with regard to possible takeovers and benchmarking.

Define the purpose of intra-firm comparisons.

Comparing between branches, divisions, areas, product ranges in order to share best practice.

What is a strength to published accounts

A valuable source of info because they been independently audited and accounts have to reflect an accurate picture of what has happened.

What is a core competence?

The unique abilities that a business possesses that provide it with competitive advantage.

What is short termism in the business setting?

Looking only for short term gains and not taking into consideration the longer term needs Of the business

List 3 Financial Data Kinds

elasticitys, revenue and liquidity statements

List 3 HR Data Kinds

labour productivity, type of managment, employer satisfaction

List 3 Operations Data Kinds

quality assurance pr, output levels sh, cost of business

What is Elkington's triple bottom line

Profit, Planet and People.

What makes the Google example a good example of research and development

62.74% market share which leads to profit and quality

Performance of a business

quality, Future, employee engagement, customer service, & brand image

According to Elkington, what are the Three areas of a company's success?

Finances, environmental impact, & how socially responsible it is in relation to employees.

What are Political actions taken by and affect the business' activities?

Taken by local, national or international authorities

What environment refers to competition, employment laws and environmental issues?

Legal environment

What is ofcom an example of?

Regulators agencies such as OFCOM that oversee the enforcement of nues that result from the passing of aus aimed at regulating businesses

What does PESTLE Analysis assess?

changes in external environment and threats + opportunities

What is Enterprise

UK government seek to establish an enterprise friendly business environment to encourage people to develop ideas

List 3 things that the Government offers?

Financial support, non- Financial support and fewer regulations

What could Brexit's Positive Impacts be?

-be no taxes on goods or limits on amount traded between UK + EU -new checks will be introduced at boarders such as Sarety checks

What are the the employment laws?

minimum wage Health + Safety and environmental legisl

List Three Reasons to Constrain Businesses?

To prevent exploitation of employees, improve industrial relations and protect employee + competition

What does the acronym PED stand for?

Price elasticity of demand is a measurement of the percentage change in quantity demanded in response to a percentage change in price

WHo are the external + internal stakeholders

Stakeholders invested in the businees data.

List 2 Profitability Ratios

Gross profit or operating profits

What are some factors for Economic change?

economic issues that arrect the whole economy

What is economic growth?

common indicator, if increased levels, GDP increase, the economy is experiencing