Business growth and objectives

Question 1

Objectives

Answer 1

Aims = what business wants to achieve in long term

Mission statement = an expression of a businesses overall vision

Corporate objectives = specific performance goals

Functional objectives = day to day goals of departments

S - specific
M - measureable
A - agreed
R - realistic
T - time-bound

Question 2

Business failure

Answer 2

Internal:
- poor planing
- lack of leadership
- ineffective marketing
- cash flow problems/lack of funds

External:
- economic challenges
- changes in consumer tastes
- legal factors
- market challenges
- technological change

Question 3

Growth strategies

Answer 3

Organic = internal expansion within a business - ansoffs matrix (new products/locations)

Inorganic = external growth - merger/takeover/JV - vertical/horizontal integration

Question 4

Corporate strategy

Answer 4

Provides a competitive advantage = need to consider internal factors (human and capital resources) as well as external factors (political and economic evironments)

Ansoffs matrix = market penetration, market development, product development, differentiation

Porter’s generic strategy = low cost, differentiation in a mass and niche market

Boston matrix = dog, star, cash cow, question mark/problem child

Distinctive capabilities = a strength which is very difficult for competitors to copy

Question 5

Strategic vs tactical decisions

Answer 5

Strategic = medium to long term planning e.g enter new overseas market, withdraw an obsolete product from sale, merge with competitor

Tactical = support overall strategy and normally short term e.g awarding a bonus to workers, decoration of business premises