Theme 3.1 Business objectives and staregy 🤔

What are corporate aims?

Broad, long term ideas as to how the business should develop.

What are corporate objectives?

A goal that a business strives to achieve in order to meet its long term aim.

What is a critical appraisal?

Assesses if the corporate aims and mission statement continue to reflect the current corporate vision.

What is a mission statement?

A set of guiding principles which is often used to steer stakeholders in order to achieve a businesses aims and objectives.

What is Ansoff’s Matrix?

A strategic tool to help a business analyse business growth.

Market penetration - existing market, existing product

Market development - new market, existing product

Product development - existing market, new product

Diversification - new market, new product. - most risky but potentially most rewarding because if offers greater opportunities to sell to a greater range of markets.

What is architecture/origin?

Refers to the contracts and relationships within and around an organisation.

What is cost leadership?

A strategy of seeking lower costs to allow a business to reduce prices and therefore increase sales and revenue.

What are distinctive capabilities?

A skill or attribute possessed by a business. A sustainable competitive advantage.

What are financial resources?

Resources used to finance a business strategy and can include cash, current assets and the ability to borrow finance for future operations.

What is innovation?

Developing a new product or process in the production of a product.

What is porters strategic matrix?

Identifies the sources of competitive advantage that a business might achieve in a market.

Includes: cost leadership, differentiation and focus (cost + differentiation).

What is reputation?

The operational factors concerned with premises, equipment and other resources needed to meet customer needs.

What are strategic decisions?

Long term and relates to achieving an overall goal.

What are tactical decisions?

Short term actions that help to achieve the strategy.

What is a SWOT analysis?

A strategic planning technique used to help a business identify its internal strengths, weaknesses, and its external opportunities and threats.

What are economic factors?

Economic variables that can affect a business such as exchange rate, inflation and interest rates.

What are environmental factors?

Businesses have a general obligation to the environment and some businesses are closely monitored.

What are legal factors?

Legal requirements that a business must follow when operating in the country.

What are a PESTLE factors?

The Political, Economic, Social, Technological, Legal an Environmental influences that can affect business strategy.

What are political factors?

Regional, national and international laws and government policies that could affect a business such as regulations and subsides.

What are social factors?

Demographic changes such as an aging population, changing lifestyles, tastes and fashion.

What are technological factors?

They adaption of technologies that could affect a business such as new production processes, mobile technology and disruptive technologies such as electronic vehicles.

What is Porters five force model?

A framework for analysing the nature of competition within an industry. It does this by looking at five main factors - threat of substitutes, threat of new entrants, bargaining power of buyers, bargaining power of suppliers and competitive rivalry. It can be used to identify the potential profitability of a particular strategic decision.

What is threat of competition?

The behaviour of competitors that may lead to the loss of market share.