A2 Part 1: Analysing the Strategic Position of a Business - Mission, Corporate Objectives & Strategy and Financial Ratio analysis Flashcards Preview

AQA A level Business > A2 Part 1: Analysing the Strategic Position of a Business - Mission, Corporate Objectives & Strategy and Financial Ratio analysis > Flashcards

Flashcards in A2 Part 1: Analysing the Strategic Position of a Business - Mission, Corporate Objectives & Strategy and Financial Ratio analysis Deck (46)
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What is the Mission Statement?

The overriding goal of the business. A strategic perspective and vision for the future.


What are objectives?

Statements of specific outcomes that are to be achieved.


What are corporate objectives?

Those that are related to the business as a whole.


What are functional objectives?

Set for each major business function and are designed to ensure that corporate objectives are achieved.


What is a strategy?

Plan of action designed to achieve a long term or overall aim.


What is a tactic?

A means by which a strategy is carried out.


What is contingency planning?

A plan designed to take account of a possible future event or circumstance (plan B).


What is SWOT analysis?

An internal and external audit.


What are the 4 parts of the Mission Model?

  • Purpose
    • Contained in the mission statement
  • Values and Beliefs
    • Reflected in business culture
  • Strategy
    • The competitive position of the business
  • Standards and Behaviour
    • Policies and behavioural patterns expected of employers


What are the characteristics of the mission statement?

  1. Contains a formulation of objectives that enables progress towards them to be measured
  2. Differentiates the business from its competitiors
  3. Defines the markets or business in which the firm wants to operate
  4. Is relevent to all major stakeholders
  5. Exites, inspires, motivates and guides
  6. Flexible
  7. Communicates key values


What are the criticisms of a mission statement?

  • Not always supported by the actions of the business
  • Often too vague and general
  • Statements of the obvious
  • Regarded cynically by staff
  • To mean anything they must be supported whole heartedly by senior management


What are the advantages of setting corporate objectives?

  • Provide strategic focus
  • Measure performance of the firm as a whole
  • Inform decision making
  • Set the scene for more detailed functional objectives


What are the internal factors influencing decision making?

  • Strengths/weaknesses of the business
  • Finances
  • Staffing/expertise availible
  • Operational capaability


What are the external influences influencing corporate objectives?

  • Opportunities and treats
  • Competitive environment
  • Economic situation
  • Political environment
  • Technological developments


What are the factors influencing functional objectives?

Mainly, they are influenced by corporate objectives but are still influenced by internal and external factors that influence the setting of corporate objectives


What is a balance sheet?

A snapshot of the businesses assets and its liabilities on a particular day - usually the last day of the financial year


What are a businesses assets?

What the business owns or what it is owed.

Liabilities + Equity


What are the businesses liabilities?

What the business owes


What is equity?

The net amount of funds invested in a business by its owners, plus any retained earnings.

What the business owes to the owners of the business.


What are fixed assets?

A company's tangiable, non-current assets that are used in business operations.

These assets will not be used up or sold in the current accounting year


What are current assets?

An item on the balance sheet that is either cash, a cash equivalent or can be converted into cash within the next year.


What are current liabilities?

An obligation that is payable within 1 year


What are trade recievables?

Amounts owed by customers buying on credit


What are accounts payable?

The trade payables due to suppliers, usually as evidenced by supplier invoices. Known as creditors.


What are trade payables?

Amounts owed to suppliers


What are taxes payable?

Amounts owed to the government but not yet paid


What is working capital?

Current Assets - Current Liabilities


What are long term liabilities?

Those obligations of a business that are not due for payment within the next 12 months.

Amounts that are owed, but not due to be paid in the next year.


What are retained earnings?

Net profits which have not been distributed to shareholders.


What is the income statement?

A summary of a management's performance as reflected in the profitability (or lack of it) of an organisation over a certain period.