Business Objectives

Question 1

Mission statement

Answer 1

• Gives a general idea of what the business exists to do

- purpose is to set this down for the benefit of all stakeholders

Question 2

3 advantages of having a mission statement

Answer 2

• provides direction
• helps with decision making
• helps to resolve conflicts

Question 3

3 disadvantages of mission statements

Answer 3

• can be ambiguous on its own
• may be unrealistic
• focused more on short term issues

Question 4

Forecasting is

Answer 4

the use of existing date to predict future trends

Question 5

Use of forecasting

Answer 5

can predict future revenue and costs to improve overall performance

Question 6

Forecasting does not take into account the

Answer 6

changing of objectives in a business

Question 7

If past data is inaccurate, the forecasting

Answer 7

will be inaccurate too

Question 8

3 qualitative forecasting methods

Answer 8

• staff
• consumer expectations
• opinions of experts/academics

Question 9

Quantitative forecasting method

Answer 9

TSA

Question 10

The four components TSA wants to find

Answer 10

1- the trend
2- cyclical variations
3- seasonal variations
4- random fluctuations

Question 11

What does the Delphi technique rely on?

Answer 11

Information from experts

Question 12

Three qualitative forecasting methods e.g Delphi

Answer 12

• delphi technique (structured)
• brainstorming (unstructured)
• intuition (unstructured)

Question 13

What are the 5 forces in Porter’s Five Force Model?

Answer 13

1- threat of new entrants to the market 
2- bargaining power of suppliers
3- bargaining power of consumers
4- threat of substitute products
5- degree of existing rivalry

Question 14

What are Porter’s generic strategies?

Answer 14

1- cost leadership
2- differentiation
3- focus or niche
4- stuck in the middle

Question 15

one disadvantage of differentiation

Answer 15

if there isn’t a patent, the product can be copied