3.1 Business Objectives and Strategy Flashcards
What is a corporate objective?
Targets set for the whole firm to reach in a given time period.
What are some typical examples of corporate objectives?
Growth
Profit maximisation
Entering new markets
Survival
Improving communities
What is a mission statement?
An action-based statement that declares the purpose of an organization and how they serve their customers.
What are the features of a good mission statement?
Differentiate business from competitors
Relevant to all stakeholders
Define the market in which a business wants to succeed
Inspire and motivate stakeholders, especially employees
Brief
Realistic
Based on consultation with stakeholders
Specific to the business
Supported by senior managers
What are the features of a poor mission statement?
Vague
Long-winded
State the obvious
Not reflect the reality of what the business values
Viewed cynically by employees
What is corporate strategy?
A medium to long term plan for achieving business objectives
What are the four categories of Ansoff’s matrix?
Market penetration, new product development
Market development, diversification
What is the category with the highest risk in Ansoff’s matrix?
Diversification
What are the four categories of Porter’s strategic matrix?
Low cost, differentiation
Focused low cost, focused differentiation
What two factors does Ansoff’s matrix take into account?
Established or new product
Established or new market
What factors does Porter’s strategic mix take into account?
Niche/mass market
Low cost / differentiation
What is operational efficiency?
Ensuring that business processes are completed with as little waste and as cheaply as possible without generating quality problems
What distinctive capabilities can competitive advantage come from?
Great R&D
Hugely motivated staff
Amazing design
Incredible operational efficiency
Highest ethical credentials
What does SWOT stand for?
Strengths
Weaknesses
Opportunities
Threats
What are some key areas where opportunities or threats may arise?
Demographic changes
New laws and regulations
Technological developments
Economic factors
