3.1 Flashcards
(25 cards)
corporate objective
specific performance goals
aim
long term, overall vision
mission statement
core values, informs stakeholders of fundamental objectives
functional objectives
day to day goals of functions within the business, dervied from corp objectives
corporate strategy
if successful should provide competitive advantage
ansoffs matrix
existing market and product = market penetration
existing market new product = product development
exisiting product new market
= market development
new new = diversification
porters strategic matrix
cost + mass market = cost leadership (most competitive in big market)
differentiation + mass = differetiation
niche + cost = cost focus
niche + diff = differentiation focus
portfolio analysis
detailed evaluation of a range of products + appropriate strategies
boston matrix
high ms and high growth = stars
high ms low growth = cows
low ms high growth = ?
low ms low growth = dogs
disintctive capabilities
- operational skills and expertise
- relationships and networks established
- reputation
- innovation
- structure and architecure
strategic decisions - entering new overseas market
HR: staff may relocate, language skills, more staff needed
Finance: increased marketing budget, investment in overseas distibution
Production: adaptations, more machinery investment
strategic decisions - withdrawing obsolete product
HR: fewer workers as output is lower, retraining staff
Finance: used elsewhere, redundancy payments
Production: cap util lower so higher production costs, stock disposal
strategic decisions - merge with competitor
HR: redundancies for duplicate roles, greater promotion opportunities
Finance: shared resources may improve cashflow, duplicate capital equipment can be sold
Production: may need reorganisation, knowledge can be shared
strategic decisions
medium to long term planning to achieve corporate objectives
tactical decisions
short term, support overall strategy
SWOT
sw - interal
ot - external
- help understand current business positions to support strategic decisions
PESTLE
- political, economic, social, technological, legal, environmental
- support effective decision making
- understand potential threats
changing competitive environment
- new businesses entering or leaving market
- laws may change (less barriers to entry for new business)
- growth of internet (increased competitors)
- changing tastes (short product life cycle)
- globalisation
porters 5 forces
pressures on an industry that impact a businesses ability to compete with rivals
porters 5 forces - industry rivalry
- businesses have limited power when competitiors are selling similar products
- rivals aim to get a better share
- consumers have lots of choice
porters 5 forces - threat of new entry
- if competitors can enter quickly without investing alot of money, barriers are low
- market contains high number of rivals
- individual businesses have little power
porters 5 forces - buyer power
- customers have power to negotiate lower prices
- business has few options when it comes to customers, has to price accordingly
porters 5 forces - supplier power
- when there is limuted number of suppliers, business has little choice and may have to pay higher prices
porters 5 forces - threat of substition
- business has little power when customers can swap their products for a rivals
- have to compete on price or USP
