Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Business A-level Edexcel > Theme 3.1 Business Objectives And Strategy > Flashcards

Theme 3.1 Business Objectives And Strategy Flashcards

(68 cards)

Start Studying
1
Q

What is a mission/corporate aim?

A

An organisations aims/long term intentions, its ultimate purpose.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is a mission statement?

A

Sets out the purpose and primary objectives of a business in the present

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the characteristics of a mission statement?

A

-provide a clear sense of purpose
-differentiates the business
-defines the brackets the firm operates in
-excites, inspires, motivates and guides

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Advantages of a mission statement

A

-focuses energy and clarifies purpose
-helps attract people and resources
-can be a great PR tool
-should motivate stakeholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Disadvantages of a mission statement

A

-not always supported by actions of the business
-often too vague and general
-often states the obvious
-often seen as a PR exercise
-not a true reflection of reality
-must be supported by senior management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What influences a mission statement?

A

-purpose
-strategy
-values
-standards and behaviour
-size of the business
-competition
-social responsibility

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are corporate aims?

A

Give a business direction and provide a purpose for what is done everyday

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are corporate objectives?

A

Should flow from the mission statement and corporate vision

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a SMART target?

A

Specific
Measurable
Achievable
Realistic
Time related

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are functional objectives?

A

Departments/functions (HR, marketing, finance and operations) set their own objectives which should flow from the corporate objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is ansoff’s matrix?

A

shows the strategies that a business can use to expand, according to how risky they are

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the key features of product development?

A

-new product/service for existing market
-means R&D innovation
-can respond to customer needs
-good where product needs to be differentiated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the key features of market development?

A

-existing product sold in a new market
-new geographical market/ new channel of distribution/ new demographic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the risks of product development?

A

-not knowing product
-high R and D costs
-competition reactions
-risk cannibalisation
-may shorten lifecycle of existing product
-damage brand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are the rewards of product development?

A

-launch substantially improved version of product
-introduce complementary products
-new product innovation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are the risks of market penetration?

A

-competition reaction
-relatively short term
-market may already be saturated
-cannibalisation
-low risk limited reward

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the rewards of market penetration?

A

-gain share from competition
-encourage customer buy/consume more
-create changes to marketing mix
-allows extension strategies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What are the key features of market penetration?

A

-trying to sell more of existing product to existing market
-steady, safe growth
-encourage them to order more often

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What are the risks of market development?

A

-product may not be accepted/desired/understood
-lack of knowledge of customer
-business may not understand new market and alienate customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What are the rewards of market development?

A

-enter new market; not reliant on one
-allows business to change promotional tactics
-new distribution channels

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What are the risks of diversification?

A

-relies on heavy investment
-cultural differences
-brand name may be diluted
-very high risk strategy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What are the rewards of diversification?

A

-allows for R and D into new products and market research
-acquisition of other businesses
-spread risk
-gives balance to products with high return

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What are the key features of diversification?

A

-new product sold in a new market
-need a clear idea of what the business expect to gain and honest risk assessments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Uses of Ansoff’s Matrix

A

-identify all your current products/services and their markets, then consider options for expansion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Limitations of Ansoff’s Matrix
-only shows part of the picture and is in its purest form -not the whole picture: SWOT and PESTLE needed for a view from more then one angle
26
What is competitive advantage?
It is gained over competitors by offering greater value e.g. lower prices
27
What is SWOT analysis?
Helps a business assess its competitive strength and the nature of its external environment
28
Use of SWOT analysis
-logical structure -focuses on strategic issues -encourages analysis of external environment
29
Limitations of SWOT analysis
-too often lacks focus -independent? -can quickly become outdated
30
What does PESTLE(C) stand for?
Political Economic Social Technological Legislation Environmental (Competitor behaviour)
31
What is Porter’s Matrix?
Shows the strategy a business is best placed to use based on its competitive advantage
32
Uses of Porter’s Matrix
-can gain competitive advantage -gain higher profits if use cost leadership -differentiated products = less elastic than competitors -focus strategy can gain a higher degree of customer loyalty
33
Limitations of Porter’s Matrix
-cost leadership could be used by competitors; risk customer loyalty -differentiation = higher costs -products being copied will eliminate differentiation -focus strategy = little opportunity for growth
34
How can low cost be achieved?
-lower cost -production on large scale to exploit EoS -can offer lower prices -little product differentiation
35
How can differentiation be achieved?
-doing something different; USP = customers will pay more -target larger market to achieve competitive advantage across whole market -superior quality -branding -wide distribution -sustained promotion
36
How can focus be achieved?
Differentiated focus -brand, image, quality -aims to differentiate in 1(+) small segments Cost focus -seek to develop a lower cost advantage -lowest cost producer will enjoy EoS -e.g. budget food items low cost regional airline
37
Advantages of low cost strategy
-high profit margins -maintain market price and gain higher profit margins -lower price and acquire market share -high levels of productivity -high capacity utilisation -EoS -bargaining power to negotiate lower prices -lean production
38
Disadvantages of low cost strategy
-few can operate as cost leader as multiple businesses cannot directly compete on cost -standard product -branding relatively unimportant
39
Advantages of differentiation strategy
-brand makes business stand out -helps develop a unique brand image -adds value = higher price can be charged -gives higher profit
40
Disadvantages of differentiation strategy
-other businesses may be able to copy the strategy if it is not sustainable or defensible (e.g. patents, copyrights)
41
Advantages of focus strategy
-easier to target a narrow market as communication and marketing can be focused -possibly develop a better understanding of customer needs
42
Disadvantages of focus strategy
-customer loyalty is vital if sales are to be maintained -the market may disappear (or no longer be a viable option) if it shrinks in size
43
What are distinct capabilities?
The competitive advantage a business achieves through developing a unique quality of the business through: reputation, innovation, architecture (relationships)
44
What is architecture?
The way a business is organised- clear corporate objectives
45
What is reputation?
How customers and potential customers see the company
46
What is innovation?
Source of competitive advantage- difficult to maintain
47
what are strategic decisions?
-long term direction of the business -what the business will do to meet its aims and objectives -proactive decision making -forward thinking and future planning
48
What are tactical decisions?
-short/medium term -how the business will implement its strategy -reactive to competitors actions -present day thinking, what happens now that needs dealing with
49
What is PESTLE analysis?
An analysis tool that aims to look at external factors and how they may have an impact on the business
50
What are political and legal factors?
The governments actions and changes to the law that impact on strategic and functional decisions made by a business -a change in government -government intervention policies -influence of the the EU on trading -tax rates (e.g. VAT) -tariffs (when importing)
51
What are economic factors?
-an increase in interest rates -an increase in inflation -unemployment rates -recession (temporary decline in economic activity) -the business cycle
52
What are social factors?
Are influenced by the make-up of humans within a specific area/business. -change in demographics (characteristics) and its impact on products produced and markets -cultural mix has changed -social trends e.g. vaping Examples: Growing population Changing family structure
53
What are technological factors?
The ongoing development of invention, innovation and sharing of technology/ processes -automation, new robotics and how it can improve productivity -innovations of industry -research and development in industry -new computer systems -trading online
54
Benefits of technology
-improved efficiency -more product innovation -reduce wastage -replace labour with capital -more efficient marketing -faster, easier, more efficient communication -efficient stock management
55
Limitations of technology
-cost -shorten life of existing products -require training -security risk of fraud and data -need regular update -downtime needed and potential faults -increased risk of job cuts which could damage reputation
56
How does technological change support the functional areas?
Marketing -social media -personalised adverts -big data Finance -payment methods -banking apps -less paper Operations -robotics -stock control -automation of product lines HR -automated messages -shared documents -online meetings
57
What are environmental factors?
Customers, investors, and the government can put pressure on a business to be more eco-friendly -climate change -weather (e.g. tourism) -sustainable production and corporate social responsibility -disappearance of wildlife
58
What is Porter’s five forces?
Threat of new entrants Threat of substitute products Buyer power Supplier power Intensity of rivalry with industry
59
Examples of barrier to entry
Patent High capital cost Customer loyalty Government policies and regulations EoS Access to resources/ distribution channels
60
What are the characteristics of markets where rivalry is low?
-small number of firms within clear market leader -low fixed costs -brand loyalty -high consumer switching costs -no excess production capacity
61
What are the characteristics of markets where rivalry is high?
-Entry in to industry is straight forward -easy for customers to move to substitute -little differentiation -competitors similar size -costly to leave industry -market not gaining
62
Benefits of Porter’s five forces
-Evaluate competitive forces that influence the business -can help support strategic decisions
63
Limitations of Porter’s five forces
-backward looking -only looks at individual companies, not the industry as a whole -doesn’t consider globalisation and technological advances
64
What are the strategies of buyer power?
-look for new customers (geographical/segments) -differentiate products to make it less easy for customers to switch -drive rivals out of the market place -promotional tactics -price wars
65
What are the strategies for supplier power?
-joint venture: work closely with supplier (possibly merge/ vertical integration) -maximise EoS (e.g. place large order) -become more attractive -seek out new suppliers
66
What are the strategies for the threat of new entrants?
-barriers to entry -patent/copyright; increase cost for new entrants -maximise EoS; produce cheaper— pass on to customer and reduce price -Brand loyalty -threat of retaliation
67
What are the strategies for the threat of substitute products?
-develop a strong brand name -promotions; give reasons to keep coming back -low cost producer
68
What are the strategies for the intensity of rivalry within the industry?
increase power -differentiate -low cost producer

Business A-level Edexcel (14 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions