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Business > 3.1 > Flashcards

3.1 Flashcards

1
Q

What are strategies

A
  • Medium to long term plans made by a business to meet objectives
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2
Q

What is a mission

A

The overall reason for a business’ existence

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3
Q

A mission statement

A

A statement of the purpose of an organisation. Provides a common focus for everyone in a firm and sense of direction.

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4
Q

Corporate aims

A

The long term targets and plans to fulfil the mission statement

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5
Q

Corporate Objectives

A

The medium to long term quantifiable targets to fulfil the mission statement

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6
Q

Corporate strategy

A

The actions taken by a business to achieve its objective

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7
Q

Critical appraisal

A

Considering the strengths and weaknesses of mission statements and corporate aims.

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8
Q

What is corporate strategy influenced by

A
  • Corporate objectives
  • Distinctive capabilities
  • Competitive environment
  • Leaders attitude to risk
  • Local, national and global economic environment
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9
Q

Ansoff Matrix 4 strategies

A
  • Market penetration
  • Market development
  • New product development
  • Diversification
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10
Q

What is market penetration

A

Existing products, Existing markets.

  • Low risk
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11
Q

What is Market development

A

Existing products in a new market

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12
Q

Product development

A

New products, existing market

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13
Q

Diversification

A

New product, New market.

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14
Q

Possible approaches of market penetration

A

possible approaches:

  • Gain market share from competitors
  • Change market mic
  • Extension strategies
  • Encourage customers to consume more
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15
Q

Potential dangers of market penetration

A
  • Competitors reaction
  • Relatively short term only
  • Market may already be saturated
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16
Q

Possible approaches of market development

A
  • Enter a new international market
  • Change promotional tactics
  • New distribution channels e.g. e-commerce
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17
Q

Potential dangers of market development

A
  • Product may not be desired or understood in a new market
  • Business may not understand the new market
  • Alienation of current customers
18
Q

Possible approaches for product development

A
  • Launch improved versions of existing products
  • Introduce complementary products
  • New product innovations
19
Q

Potential dangers of product development

A
  • Damage to brand

- May shorten the product life cycle of existing products.

20
Q

Possible approaches of diversification

A
  • R&D into new products and market research into new markets

- Conglomerate integration

21
Q

Potential dangers of diversification

A
  • Relies on heavy investment
  • Cultural difference
  • Brand name may be diluted
22
Q

Michael Porters generic strategy

Definition

A

Categorises strategies businesses can adopt to gain a competitive advantage

23
Q

Porter - “Stuck in the middle”

A

Businesses will fail if they don’t aim for highest differentiated or lowest cost products.

24
Q

Porters generic strategy, 4 titles

A
  • Cost leadership
  • Focused cost leadership
  • Focused Differentiation
  • Differentiation
25
Q

Cost leadership

A

Lowest cost, mass market

26
Q

Focused cost leadership

A

Lowest cost, Niche market

27
Q

Focused differentiation

A

Highest differentiated, Niche market

28
Q

Differentiation (Porters Generic Strategy)

A

Highest differentiated, Mass Market.

29
Q

Porters Generic strategy - Low cost

A

Porter states a strategy of low cost can be successful in mass and niche markets.
Producing a good/service at the lowest cost possible.

30
Q

Porters Generic Strategy - Differentiation.

A

Can be successful in either a mass or niche market.
Offering a unique product that stands out from competitors.
Focus on R&D and innovation

31
Q

Portfolio Analysis

A

Looks at the range of products and brands a business has.

32
Q

What is the reason for portfolio analysis

A

Can help a business identify where their products and services are positioned in a market and how their risk is spread.

33
Q

The aims of portfolio analysis

A
  • Spread risk
  • Growth
  • Identify gaps in the market
  • Economies of scale
  • Reach a wide audience through product and market development.
34
Q

What does SWOT stand for

A
  • Strengths
  • Weaknesses
  • Opportunities
  • Threats
35
Q

What is the use of SWOT

A
  • Structured approach to analysing a business
  • Considers internal and external issues
  • Includes Qualitative and Quantitative data
36
Q

How do businesses adapt to SWOT

A
  • Maximise strengths
  • Minimise weaknesses
  • Take advantage of opportunities
  • Avoid threats.
37
Q

Are Strengths and weaknesses Internal or External

A

Internal

e. g.
- Culture
- Financial performance
- Marketing etc.

38
Q

Are opportunities and threats Internal or External

A

External

e. g.
- Competition
- Legislation
- Trends/fashion

39
Q

PESTLE (External impacts)

A
  • Political
  • Economy
  • Social
  • Technology
  • Legal
  • Environmental factors
40
Q

Porters five forces

A
  • Buyer power
  • Consumer power
  • Substitute threat
  • Barriers to entry
  • Rivalry
41
Q

Horizontal competition

A

Threat from new competitors

  • Barriers to entry
  • Substitute threT
42
Q

Vertical competition

A
  • Bargaining power of suppliers

- Bargaining power of customers.

Business (11 decks)

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