A2 Part 1: Analysing the Strategic Position of a Business - Mission, Corporate Objectives & Strategy and Financial Ratio analysis Flashcards
(46 cards)
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?
- Contains a formulation of objectives that enables progress towards them to be measured
- Differentiates the business from its competitiors
- Defines the markets or business in which the firm wants to operate
- Is relevent to all major stakeholders
- Exites, inspires, motivates and guides
- Flexible
- 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.
