3.1

Question 1

What is a mission statement

Answer 1

The overriding purpose of the business supports its vision for the future

Question 2

Criticisms of mission statements

Answer 2

-Often too vague and general
-Not always supported by actions of the business

Question 3

Define Corporate objectives

Answer 3

Specific performance goals derived from a firms overall aim, provide strategic focus, measure performance and inform decision making

Question 4

Define Functional Objectives

Answer 4

Day to day goals of departments derived from corporate objectives. Must be carefully aligned across departments so everyone is working towards a shared goal.

Question 5

Factors influencing business objectives

Answer 5

Size and age of the business, legislation, competition etc

Question 6

What is Ansoff’s matrix?

Answer 6

Tool for business with a growth objective, used to identify an appropriate corporate strategy and identify risks.

Question 7

What are the 4 areas of Ansoff’s matrix?

Answer 7

-Market penetration
-Product development
-Market development
-Diversification

Question 8

Define Market penetration

Answer 8

Existing products into existing markets - least risky strategy

Question 9

What is the aim of market penetration?

Answer 9

To increase market share by:
-getting existing customers to buy more
-widen range of existing products

Question 10

Evaluating market penetration

Answer 10

-Businesses focus on markets and products it knows well
-Exploits insights on what customers want
-Unlikely to need market research

Question 11

Define product development

Answer 11

A growth strategy where a business aims to introduce new products into existing markets

Question 12

Evaluating product development.

Answer 12

-Plays on strengths of an established business
-Emphasis on effective market research and innovation
-Exploits existing customer bases

Question 13

Define market development

Answer 13

A growth strategy where the business seeks to sell its existing products into new markets

Question 14

Approaches to market development

Answer 14

-Entering new geographical markets
-Reposition product
-Seek complementary locations

Question 15

Evaluating market development

Answer 15

-Logical strategy where existing markets are saturated or in decline
-Existing products may not suite new markets

Question 16

Define Diversification

Answer 16

Where a business markets new products in new markets

Question 17

Evaluate Diversification

Answer 17

-Risky strategy as no experience, few economies of scale

Question 18

What are some approaches to diversification?

Answer 18

-Innovation and R&D
-Acquire a new business in the market

Question 19

Define competitive advantage

Answer 19

An advantage over competitors gained by offering consumers greater value by means of lower prices or by providing greater benefits and services that justifies higher prices

Question 20

What is a low-cost strategy?

Answer 20

Become the lowest-cost operator. Involving producing on large scale enabling the business to exploit economies of scale.

Question 21

Features of low-cost operators

Answer 21

-high levels of productivity & efficiency
-High capacity utilisation
-Bargaining power

Question 22

What is differentiation?

Answer 22

Aiming to offer a product that is distinctively different from competition, with the customer valuing the differentiation

Question 23

What are some ways to achieve differentiation?

Answer 23

-Superior product quality
-Branding
-Wide distribution channels
-Sustained promotion

Question 24

What is swott analysis

Answer 24

It helps a business assess its competitive strengths and the nature of its external environment

Question 25

What does swot stand for?

Answer 25

-Strengths -Weaknesses -Oppotunities -Threats

Question 26

How do you assess opportunities and threats?

Answer 26

-How to take advantage of opportunities -How to protect against threats -Role of risk management

Question 27

Advantages of SWOT analysis?

Answer 27

-Logical structure -Focuses on strategic issues -Encourages analysis f external environment

Question 28

Weaknesses of swot

Answer 28

-Lacks focus -Becomes out of date quickly

Question 29

How can we asses strengths and weaknesses?

Answer 29

-Competitive advantages -Key performance indicators

Question 30

What are strategic objectives?

Answer 30

Focused on long-term, higher risk & uncertainty, difficult to change, likely to involve significant investment

Question 31

What are tactical objectives?

Answer 31

Focused on short term, relatively low risk, realistic & achievable, Easy to change

Question 32

Key benefits of cost efficiency

Answer 32

-Lower unit costs -Improved cash flow -Higher return on investment

Question 33

Employee welfare objectives

Answer 33

-Staff retention -Quality of customer service

Question 34

What are customer satisfaction objectives?

Answer 34

-Customer service -Quality

Question 35

What are social objectives?

Answer 35

-Corporate social responsibility

Question 36

What is PESTLE analysis?

Answer 36

A framework for assessing the key features of the external environment facing a business

Question 37

What does PESTLE stand for?

Answer 37

Political, Economic, Social, Technological, Legal, Ethical/Environmental

Question 38

PESTLE: Example of political factors?

Answer 38

Competition policy, Industry regulation, Gov spending & tax policies.

Question 39

PESTLE: Economic factors

Answer 39

Interest rates, Consumer spending & income, Exchange rates, Business Cycle (GDP)

Question 40

PESTLE: Social factors

Answer 40

Demographic change, Impact of pressure groups, Consumer tastes & fashions, Changing lifestyles.

Question 41

PESTLE: Technological factors

Answer 41

Disruptive technologies, Adoption of mobile technology, New production process.

Question 42

PESTLE: Legal factors

Answer 42

Employment law, Minimum wage, Health & Safety laws, Environmental legislation

Question 43

PESTLE: Ethical/ Environmental factors

Answer 43

Sustainability, Tax practises, Ethical sourcing, Pollution & carbon emissions

Question 44

What are Porters 5 forces?

Answer 44

Power of suppliers, Threat of substitutes, Power of customers, Threat of new entrants, Intensity of rivalry

Question 45

SWOT: Examples of strengths

Answer 45

Trusted, reputable brand recognised by many

Question 46

SWOT: Examples of weaknesses

Answer 46

-Cash flow concerns -Lower profits than competitors

Question 47

SWOT: Examples of opportunities

Answer 47

Expanding markets

Question 48

SWOT: Examples of Threats

Answer 48

-Declining market -Increased competition

Question 49

What is a Cost Leadership approach?

Answer 49

An approach taken by business that compete on price, and seek to be cheapest retailer or producer within the market

Question 50

What is the differentiation focus approach?

Answer 50

An approach taken by businesses which compete in terms of benefits offered to customers from the purchase of its products or services

Question 51

Benefits of Porters 5 forces model

Answer 51

-Helps gain competitive advantage -Shows potential market entrants & how profitable the market is & where best to position

Question 52

Define Star product

Answer 52

High growth rate and high level of market share -Require ongoing investment if they want to be cash cows

Question 53

Define Cash cow product

Answer 53

-Low growth market with high market share -Can be used to fund development of other products

Question 54

Define Question marks

Answer 54

-High growth low market share -Requires significant investment -Risk they may become dogs

Question 55

Describe Dog products

Answer 55

-Low growth market with low market share -Divest/phase out products -Use remaining profit to be reinvested in business

Question 56

Define Distinctive capability

Answer 56

When a businesses has a particular strength it is very difficult for competitors to copy

Question 57

Examples of distincitve capabilities

Answer 57

-Operational skills & expertise in the business -Relationships & networks -Reputation and image of the business