Business Objectives and Strategy Flashcards
(146 cards)
1
Q
give some examples of stakeholder objectives
A
shareholders-dividends
customer-quality of product/service
2
Q
give an example of stakeholder objectives
A
customer wants to buy from business with ethical behavior
business wants low costs
3
Q
mission statement
A
idea of what did business exists to do
4
Q
aims
A
overall long term thing business wants to achieve
5
Q
objective
A
short term, measurable achievement
6
Q
tactical objective
A
short term objectives, likely to do with day to day activities
7
Q
strategic objective
A
how a business plans to achieve its aims or goals
longer term approach
8
Q
what is the criteria for setting objectives
A
SMART
9
Q
what does SMART stand for
A
specific measurable achievable realistic time-bound
10
Q
corporate objective
A
help to define the culture of the business
change over time
11
Q
hierarchy objectives
A
overall purpose
vision for future
aims for achieving mission+vision
objectives in place
12
Q
constraints of objectives
A
lack of finance
poor communication
state of the economy
laws which change operation of the business
13
Q
what is the difference between objective,strategy and tactics
A
objective-to reach a goal
strategy-action plan to reach objective
tactic-step taken to achieve strategy
14
Q
how can a business formulate a strategic plan
A
internal/external audit
15
Q
what do internal and external audits look at
A
internal-strengths+weaknesses
external- opportunities+threats
16
Q
what four areas does an internal audit look at
A
people
marketing
operations management
financial
17
Q
what are some of the areas an external audit looks at
A
competition
economy
political issues
ethics
18
Q
what is a PEST analysis
A
external factors in an audit
political,economic,social,technological
19
Q
how can a business formulate a strategy
A
using SWOT analysis
strengths,weaknesses,opportunities,threats
20
Q
apart from a SWOT what else can a business use to formulate strategy
A
market research
ratio analysis
government stats
21
Q
how can employees influence business objectives
A
could be part of trade union
lots of them collective power
experts/specialists hard to replace, power position
22
Q
how can suppliers influence business objective
A
could be in a monopoly position
23
Q
what does porters 5 forces model do?
A
analyse level of competition in an industry
24
Q
what are porters 5 forces
A
threat of new entrants bargaining power of suppliers bargaining power of consumers threat of substitutes (includes changes in technology) degree of existing competitive rivalry
25
how would porters 5 forces model be displayed
intensity of rivalry in the middle with arrows to other four forces
26
what are the criticisms of porters 5 forces
assumes a classic perfect market
people apply it to an individual businesses not industry
markets can change (e-commerce)
27
what do porters generic strategies show
how company can achieve competitive advantage in its industry
28
what are porters three generic strategies
cost of leadership
differentation
focus/niche
29
explain porters generic strategy of cost of leadership
aim of being lowest cost producer in field
30
explain porters generic strategy of differentiation
produce a range of goods perceived as different to competition
31
explain porters generic strategy of focus/niche
produce for particular sector of market-usually consumers in sectors prepared to pay premium
if no patent, product can be copied+no advantage
32
what is the fourth strategy of porters generic strategies
'stuck in the middle'
| business that tries to adopt all 3 generic strategies likely to be unsuccessful
33
what are the functions of a business
```
marketing
production and operations
accounting and finance
human resources
customers service
```
34
why would a business change its objectives
economic change
legal issues
political issues
social attitudes
35
accounting and finance (business functions)
monitors+controls monetary resources
36
production and operations (business functions)
transforming resources into goods
| operations-controlling+designing process of production e.g stock control
37
marketing (business functions)
creates the desire to buy a product
| conducts market research
38
human resources (business function)
responsible for well being of employees
39
customer service (business functions)
ensuring satisfaction with a product or service
40
operational objective
specific production targets set by organisation to ensure goals are achieved
41
give examples of some operational objectives
maintain quality
| maximise utilisation of materials
42
social enterprise
set up with main objective is to help people
43
Privatisation
public sector enterprise sold by the gov
44
nationalisation
private sector enterprise taken over by the gov
45
corporate social responsibility
businesses address social and environmental considerations as part of their normal business activities.
46
which areas do businesses have to consider their corporate responsibility
environment+ethics
charity+fundraising
diversity
financial
47
advantages of being a socially responsible corporation
reputation
| attract more staff
48
disadvantages of being a socially responsible coporation
large amount of time
| short term costs
49
how could a business become more socially responsible
less plastic packaging (environment)
| charity/community schemes, (EDF gives workers day off per/y to work on community projects)
50
business plan
sets out how a business intends to achieve its objectives
51
what is the content of a business plan
```
the idea
finance
objectives
target market
competitors
```
52
advantages of a business plan
requires strategic review, see how well each functional area is performing
sense of direction
sets out role of each department
encourages communication+coordination
53
disadvantages of a business plan
opportunity cost of time
demotivates those responsible for carrying it out if have no input
useless unless implemented
54
opportunity cost
cost of the next best alternative foregone
55
benefits of a strategic review
analysis of SWOT/PEST undertaken
lead to improvement in long term profitability
consensus established among senior managers
56
strategic review
review which is about improving+sustaining business performance
57
what kind of business uses a strategic review
already established
58
why would employees have an interest in a businesses plan
objective-pay rise
| is likely to happen looking at the plan?
59
why would suppliers have an interest in a business plan
objective-regular orders+increasing size
| plan might include business growth which could increase their order
60
what is the purpose of a plan-do-review process
make sure that the business is 'on track'
61
stages of plan do review cycle
plan-establish objectives
do-implement plan
review-formal on going evaluation
62
advantages of a plan do review
methodical, forces strategic approach
deparments get clarity on what they have to 'do'
regular reviews of departments-deviations from plan can be corrected
63
disadvantages of a plan do review
lengthy-opportunity cost
not flexible once objectives have been set
some employees regard on going review of work 'spying' don't feel trusted
64
contingency plan
plan devised for an outcome other than what is the expected outcome
65
disadvantages of a contingency plan
opportunity cost
| people who construct plan,not honest with their assessment of risk
66
advantages of a contingency plan
co-ordination amongst employees
operations can continue to run as best as possible
if plan for worst can prevent some outcomes
67
what would happen to stakeholders if a contingency plan wasn't in place
supplier could receive fewer orders
bad reputation, let customers down
gov lose tax revenue
68
crisis management
organization deals with an event that threatens to harm the business
deal wi potentially damaging even quickly after it occurs
69
how is risk management different to crisis management
risk management but looks more at minimizing risk
70
what are some solutions to possibility of a crisis
make sure insurance policies up to date
| 'trial runs'
71
what is the relationship between risk and reward
big risk expected big reward
72
uncertainty
inability to calculate the costs and benefits of a decision
73
risk
chance of an adverse occurrence
74
reward
possible return particular activity may make
75
what are the external causes of uncertainty
economy
politics
competition
76
what are the internal causes of uncertainty
organization+HR
stakeholders (shareholders+employees)
technology
77
how could human resources be an internal cause of uncertainty
does culture of business support decision?
| can employees implement new decision?
78
how is stakeholders an internal cause of uncertainty
shareholder revolt?
| industrial action from employees
79
how does uncertainty affect aims and objectives
the decision to adopt objective may still be make but is done with cautious, not ambitious
80
how does uncertainty affect decision making
making decision in groups harder
| severity of risk is subjective
81
how can economic risk be managed
analysis of economic indicators (GDP,interest rates, unemployment rate)
time series analysis
82
how can political risk be managed
up to date with current policy intentions
83
how can competitive risk be managed
strategy based on SWOT
| market research
84
unquantifiable risk
unexpected, can't put a value on it
85
quantifiable risk
can be predicted, value can be placed on
86
give an example of a quantifiable and unquantifiable risk
if factory burnt down
cost to rebuild known
amount of revenue from future customers not known
87
how can organizational risks be managed
foster a 'change culture' less risk of resistance if wanted to
appropriate incentive during restructuring
88
how can stakeholder risk be managed
consultation
89
risks faced by an entrepreneur
not securing finance
| unsuccessful product/service
90
local market
where customers are short distance from suppliers
91
national market
where customers are spread throughout the country or over large area
92
international market
where customers are spread throughout the world
93
what is forecasting
use of existing data to predict future trends
94
what are the two types of forecasting
qualitive (experience) and quantitative (numbers)
95
what are the structured methods of qualitative forecasting
Delphi technique
| forecasting
96
what are the unstructured methods of qualitative forecasting
brainstorming
| intuition
97
describe the Delphi technique as a form of structure qualitative forecasting
relies on expert info
takes form of questionnaire
ask experts opinions on outcome of business situation
all info is summarised
98
describe intuition as a form of unstructured qualitative forecasting
rely on knowledge of business,markets,economy and past experience
99
describe expert opinion as a form of structured qualitative forecasting
people who have extensive knowledge about the market
100
describe brainstorming as a form of unstructured qualitative forecasting
using a group to solve problems
| discuss ideas for solutions
101
advantages of structured forecasting
people have experience likely to know more than you
| predictions could be more accurate
102
disadvantages of structured forecasting
not part of your business don't know how it operates
103
advantages of unstructured forecasting
you know your business and likely outcomes
104
disadvantages of unstructured forecasting
isn't based on experts
105
advantages of forecasting
show trend in figures, helps business plan ahead
| see how well business is likely to perform in future
106
disadvantages of forecasting
only as reliable as the data put forward, if not accurate
| external influences aren't taken into account
107
what is cyclical variation
amount by which actual sales in a period vary from moving average figures
108
what is time series analysis
calculates a moving average
109
how do you calculate cyclical variation
actual sales-moving average sales
110
how do you use time series analysis to predict future values
moving averages-odd number of years
111
how do you calculate the moving average and use it to forecast
```
find trend period
calculate moving total
calculate moving average
calculate cyclical variation
plot trend, line of best fit
add/subtract av cyclical varitation to forecast figures on graph
```
112
financial measures of business performance
```
final accounts
ratio analysis
gearing
cash flow
budgets
variance analysis
```
113
non-financial measures of business performance
```
markets share
resource utilization
environmental impact
quality
customer satisfaction
```
114
cashflow forecast
estimates of likely inflows and outflows into and out of business
115
variance analysis
difference between actual and budgeted figures
116
why is cash flow important for a business
monitor,compare forecast with statement
| potential lenders want to see it
117
why does a businesses published accounts not provide a complete picture of performance
only looking at financial performance
118
what do liquidity ratios asses
level of cash in business
119
how to improve cash flow
more sales
| factoring
120
what is factoring
'selling' debt of business revenue from debtors can be received earlier
factoring company with take proportion of value of debt as pay
121
advantages of measuring business performance
identifies weak points
helps set objectives
compare as your business grows
122
disadvantages of measuring business performance
time consuming
123
importance of non financial performance measures
assess the impact business is having on stakeholders
| help indicates future finance performance
124
why do businesses measure performance
see where weaknesses are
| see how its progressing
125
what are the decision making tools for a business
decision trees
| Ansoff matrix
126
decision trees
when business is considering two or more options
show likely financial return for each decision
combine risk and return
127
what two aspects are decision trees based on
probability of outcome
| estimated monetary reward
128
whats the difference between ethical business and socially responsible corporation
CSR-responsibility to all stakeholders
| morally correct behavior
129
which characteristics did porter identify with high profit industries
weak supplier
weak buyer
high barriers to entry
130
what do the symbols in decision trees show
square-a decision, no. of lines drawn from shows amount of options
circle-possible outcomes
131
how do you calculate expected values on decisions trees
estimated monetary valueXprofitability
132
benefits of decision trees
Choices are set out in a logical way
options & choices are considered at the same time
Use of probabilities enables the “risk” of the options to be addressed
Likely costs are considered as well as potential benefits
Easy to understand & tangible results
133
drawback of decision trees
just estimates – always prone to error
Uses quantitative data only – ignores qualitative aspects of decisions
Assignment of probabilities and expected values prone to bias
134
ansoff matrix
is a marketing planning model that helps a business determine its product and market growth strategy.
135
what does an ansoff matrix suggest
that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets
136
advantages of an Ansoff matrix
forces think about the expected risks of moving in a certain direction
It lays out possible strategies for growth
it focuses the business
Presentable to stakeholders
Creates a risk aware culture
137
disadvantages of an Ansoff matrix
Only a theoretical model
Does not take into account the activities of external competitors
Accurate predictions are difficult- unforeseen events
138
what are the quadrants of the Ansoff matrix (top two left to right then bottom two left to right)
market penetration + product development
| market development +diversification
139
what are the arrows going on the x and y axis of an ansoff matrix
x-left at top existing product then new product
| y- side top existing markets then new markets
140
which factors need to be taken into account when making a decision
level+nature of risk
accuracy of forecatss
potential for bias
volatility
141
types of decision making based on length
short-term-Day to day, up to a year
medium-term –Monthly up to 3-5 years
long-term decisions-Longer than 5 years
142
describe tactical, operational and strategic decisions
strategic- Long term affecting whole business
tactical –Middle management impact part of business
operational decisions-day to day taken by department managers
143
when would you use qualitative forecasting
fluctuating demand
| little historical data available
144
qualitative decision making tool
ansoff
145
quantitative decision making tool
decision tree
146
what three responses should a business have in a crisis
communications response
management response
operational response
