3.1 Flashcards
Corporate objectives
Objectives that relate to the business as a whole
Mission statement
Overriding goal of the business and the reason for its existence
Critical appraisal
Techniques that enable you to evaluate the quality of published research including the research methodology, potential bias, strengths and weaknesses
Ansoff’s matrix
Market penetration: Take a greater share of an existing market with existing products (Existing product, existing market)
Product development: Extending an new product within an existing market (New product, existing market)
Market development: Finding/Creating new markets for existing products ( Existing product, new market)
Diversification: Creating new product lines in new markets (New product, new market) Biggest risk
Porter’s strategic matrix
Cost leadership: Most competitive in the market (broad and cost)
Cost focus: Competitive in a particular product or niche market (narrow and cost)
Differentiation leadership: Distinctive company recognised for uniqueness, quality or personality (Broad and differentiation)
Differentiation focus: Complete differentiated product in a new/niche market (Narrow and differentiation)
Aim of portfolio analysis
Gain valuable insight into your market position, where to direct investments, how to enhance your own products, and the total category sales
Distinctive capabilities
Capabilities a firm has which other firms cannot replicate even after they realize what the benefits are that owning the capability confers
SWOT analysis
Strengths and weaknesses:
- Are internal to the business
- Relate to the present situation
Opportunities and threats:
- Are external to the business
- Relate to changes in the environment which will impact the business
MATCH - Strengths with opportunities
CONVERT - Weaknesses into strengths
Aims of SWOT
- What the business does better than the competition
- What competitors do better
- Whether it is making the most of the opportunities available
- How a business should respond to changes in its external environment
PESTLE
External influences
- Political
- Economic
- Social
- Technological
- Legal
- Environmental
Porter’s 5 forces
Entry threat:
Factors preventing new companies from entering
Buyer power:
Power of customers to determine prices
Supplier power:
Ability of suppliers to set prices
Rivalry:
How much competition exists in the market
Substitute threat:
Risk of alternative products/services
SMART targets
Acronym for the attributes of a good objective: Specific, Measurable, Agreed, Realistic and Time Specific
Corprate strategy
The plans and policies developed to meet a company’s objectives. It is concerned with what range of activities the business needs to undertake in order to achieve its goals
Key performance indicators
The quantifiable metrics a company uses to evaluate progress toward critical success factors
