analysing strategic position of a business Flashcards
(37 cards)
What is a mission statement?
A qualitative statement of an organisation’s aims that uses language intended to motivate employees and convince customers, suppliers and others of its sincerity.
Name 3 internal influences on a business’s mission.
Values of the founders, organisational culture, performance of the business.
Name 3 external influences on a business’s mission.
Competitive environment, economic conditions, stakeholder interests.
What are corporate objectives?
Medium- to long-term goals established to coordinate business activities and give a sense of direction.
What is the difference between strategy and tactics?
Strategy is the long-term plan to achieve objectives, while tactics are the short-term actions taken to implement the strategy.
What is short-termism?
The pressure to deliver quick results at the expense of long-term performance.
How do strategy and functional decisions link?
Strategy sets the direction, which is implemented through functional decisions in marketing, HR, operations, and finance.
Give one example of how internal environment affects objectives.
Poor cash flow may lead to survival objectives over growth.
What does Return on Capital Employed (ROCE) measure?
A firm’s profitability by comparing operating profit to capital employed.
What is the formula for current ratio?
Current Assets ÷ Current Liabilities
What does a gearing ratio show?
The proportion of a firm’s capital that comes from long-term debt.
What does inventory turnover measure?
How often inventory is sold and replaced in a period.
Name two efficiency ratios.
Payables days and receivables days.
Why is it important to compare ratios over time or with other businesses?
To assess trends and benchmark performance.
What is a core competence?
A unique ability that gives a business a competitive advantage and adds value to customers.
Give two examples of non-financial data to assess performance.
Labour turnover and market share.
What is the Triple Bottom Line?
A framework by Elkington that assesses performance based on Profit, People and Planet.
Why assess both short-term and long-term performance?
To ensure sustainable success and strategic alignment.
Name three types of laws that affect business strategy.
Competition law, labour law, environmental legislation.
How can government policy affect strategy?
Through taxation, subsidies, infrastructure investment, and regulation.
What is the role of regulators in the business environment?
To ensure fair competition and protect consumer interests.
Name 4 key economic indicators that influence business.
GDP, inflation, exchange rates, interest rates.
How can a strong pound (£) affect UK exporters?
It can make UK goods more expensive abroad, reducing competitiveness.
What is fiscal policy?
Government decisions on taxation and spending.
