3.1

Business objectives

Goals for a business

Business strategy

How a business achieves the objectives

Mission statement

Overall purpose of a business

Corporate aim

General statement- long term

Corporate objective

Medium/ long term quantifiable

department objectives

Targets each department for small short term aims

Smart

Specific, measurable, Assignable, realistic, Time related

Why do businesses set objectives?

1. Shape strategy

2. Measure

3. make decisions

4. inform shareholders and investors of plans

What are the pros and cons of mission statements

pro- easier decision making, motivates staff

cons- unrealistic, out of date, not supported by senior management.

What is Ansoffs matrix?

Its about risk

What do the 4 components of ansoffs mean?

1. market penetration- existing customers to existing products

2. Market development- new customers to buy existing products

3. Product Development- Existing customers to new products

4. Diversification- New products to new customers

What is Porters model

Measures competitive advantage

What do the components in Porters model mean

1. Cost leadership- Aims to be the lowest cost operator in the industry

2. differentiation- making products more attractive then competitors

3. Cost focus- Focus on niche markets that offer lower costs

4. differentiation focus - Businesses offering something new within the niche market

What is the Boston matrix

Looks at the product life cycle and the product range of businesses

What components are in the Boston matrix

1. Star- cash flow is positive and in growth phase of plc

2. Question mark- Introduction in plc and cash flow is negative

3. cash cows- Maturity stage of plc and positive cash flow with low costs

4. dogs- product has failed and is in decline on the plc

Pros and Cons of the Boston Matrix

Pro- Examines the businesses products together, quick and easy, helps with planning

cons- Limited about the future of the product, May not be the same for all businesses.

What is John Kays theory?

Looks at the distinctive capabilities of the business and see how they are better than there rivals and if they can be copied. CA The capabilities need to be difficult to fully to allow a CA

What are the components of John Kays theory?

Architecture- Relates to the managerial skills that help to form good relationships with employees

Reputation- Realtes to the product quality

Innovation- Ability of a business to relate well to customers

What does SWOT Analysis stand for

Strengths, Weaknesses, Opportunities, Threats

Example of internal- SW of SWOT

1. financial performance

2. HR

3. Marketing

Example of external- OT of SWOT

Economic environment, technological change, degree of competition

Pros and Cons of SWOT analysis

Pros- Simple, Helps managers, looks at impacts of environment

Cons- Lack focus, out of date

Pestle Analysis

A framework for assessing factors within the external environment that influence business behavior

What is the 5 Forces Model

Porters model is about a framework to analyse the competition within an industry.

What does the 5 forces model look at?

1. Competitors- pressure from rivals

2. Threat of new entrants

3. Threat of substitutes

4. Bargaining power for suppliers- pressure a supplier can exert on a business

5. bargaining power for consumers- pressure consumers can exert on a business

What does incremental and disruptive mean

incremental- market changes over time

Disruptive- Changes are rapid

What does PESTLE stand for?

Political, Economic, Social, Technology, Legal, Environmental, Ethical

What are the Pros and Cons for PESTLE

Pros- Easy to understand, managers can prepare for threats

cons- quickly outdated, opportunity costs, Time consuming