7.1 Flashcards
(19 cards)
What is a mission statement
A mission statement sets out what a firm is trying to achieve,
It may include: the firms beliefs, what it values and how it intends to compete.
What is the purpose of setting a mission statement
To let all employees know what to aim for/achieve, actions directed towards achieving it and it motivates employees.
A mission statement will only have value if it is:
• clear
• inspirational
• informative
• realistic
Influences on the mission of a business
• PESTLE
• Corporate Social Responsibility
• Competitors actions
• Threats & weaknesses of business
What are corporate aims?
Corporate aims are long-term plans of the business from which its corporate objectives are derived.
The aims are qualitative targets.
What are corporate objectives?
Corporate objectives are medium to long-term goals established to coordinate the business.
These objectives enable the mission and aims to be turned into quantitative goals that are SMART.
What influences corporate objectives
•Market position
•Innovation
•Social responsibility
•Financial resources
•HR
•Physical resources
•Profit maximisation
•Productivity
Internal influences on corporate objectives
Experience/ knowledge, financial position, operational issues
External influences on corporate objectives
Political & legal, competition, social trends, economy
Other influences on corporate objectives
• Market standing
• Short - termism
• Business ownership
what is market standing
Where business try and establish an image once completed they only try to retain their customers not gain more.
what is Short-termism
When a company only focuses on short term and 6 month profits,
this is a cost of long-term prospects.
Example: private equity firm
what is strategic planning
long-term plan that is focused on the business as a whole,
example: where do you want to go… how to get there
Strategic planning process
1) SET mission & business objectives
2) PLAN how to achieve the objectives
3) IMPLEMENT the plan
4) EVALUATE the results
benefits of strategic planning
gives a clear direction,
efficient use of resources,
way of measuring progress,
Difference between corporate strategy and tactics
Corporate strategy is a long-term plan to achieve the businesses corporate objectives.
Tactics describe the smaller decisions/ actions the firm uses when putting its strategy into place.
what is SWOT analysis
Strengths, weaknesses, opportunities and threats
benefits of SWOT analysis
- low cost strategy
- can be combined with other techniques
- encourages managers to develop plans
- looks out for threats and opportunities to business
drawbacks of SWOT analysis
- doesn’t offer solutions
- only as good as the data it is based on
- doesn’t help managers look at importance of an element
