Define the term corporate objective.
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Define the term corporate objective.
A corporate objective is a specific performance goal set by senior management for the business to achieve over time.
True or False?
Corporate objectives often focus on increasing market share or profit, achieving sales growth, or new product/market development.
True.
Corporate objectives often focus on increasing market share or profit, achieving sales growth, or new product/market development.
What does SMART stand for in relation to objectives?
SMART stands for:
Specific
Measurable
Agreed
Realistic
Time-bound
True or False?
Objectives should be specific, measurable, achievable, relevant and time-bound.
False.
Objectives should be specific, measurable, agreed, realistic and time-bound.
What is a mission statement?
A mission statement is an expression of a business's overall aim as well as its core values and context.
True or False?
Aims are sometimes criticised as being little more than an exercise in public relations.
False.
Mission statements are sometimes criticised as being little more than an exercise in public relations.
Define the term functional objective.
A functional objective is the day-to-day goal of functions or departments within the business, derived from the overall corporate objectives.
Why do functional objectives need to be carefully aligned across departments?
Functional objectives must be carefully aligned across departments so that all parts of the business are working towards the shared goal.
Define the term corporate strategy.
A corporate strategy is a successful plan to achieve corporate objectives and helps to provide a competitive advantage.
What does Ansoff's matrix identify?
Ansoff's matrix identifies an appropriate corporate strategy to achieve the objective of growth and the level of risk associated with the chosen strategy.
What is the meaning of diversification?
Diversification is a risky growth strategy, as it involves targeting a new market with entirely new or redeveloped products.
True or False?
Porter's Generic Strategic Matrix recommends businesses adopt either a cost leadership or a diversification strategy to achieve competitive advantage.
False.
Porter's Generic Strategic Matrix recommends businesses adopt either a cost leadership or a differentiation strategy to achieve competitive advantage.
True or False?
A business operating in the mass market should always adopt a cost leadership strategy.
False.
A business operating in the mass market could adopt either a cost leadership or a differentiation strategy, depending on what it is that makes them stand out from their competitors.
Define the term cash cow.
A cash cow is a product sold in lower-growth markets where it has a high market share and generates more cash than it needs to maintain its market position.
What is the aim of portfolio analysis?
The aim of portfolio analysis is to carry out a detailed evaluation of a full range of products in order that appropriate strategies may be identified and pursued.
According to Ansoff's matrix, by what term is targeting new markets with existing products known?
Targeting new markets with existing products is known as market development.
True or False?
A market development strategy involves targeting existing markets with new products.
False.
A market development strategy involves finding and exploiting new market opportunities for existing products.
What is a star product in the Boston Matrix?
A star is a product sold in high-growth markets and has a high level of market share.
If a business fails to adopt either a cost or a differentiation focus, what do they risk?
A business that fails to adopt either a cost or a differentiation focus risks being stuck in the middle, unable to compete successfully with rivals in the market.
True or False?
Dogs should be divested.
True.
Dogs have little potential for future growth and should be divested so that finance and effort may be invested in other products.
What is a distinctive capability?
A distinctive capability is a particular business strength that is very difficult for competitors to copy.
What are tactical decisions?
Tactical decisions are made to support the overall strategy and are usually short-term.
What does the acronym SWOT stand for?
SWOT stands for:
Strengths
Weaknesses
Opportunities
Threats
True or False?
Strengths should be eliminated in a SWOT analysis.
False.
Strengths should be harnessed in a SWOT analysis. Weaknesses should be eliminated.
State the meaning of opportunity.
An opportunity is an option a business may exploit to enjoy further success.
True or False?
Economic indicators becoming more favourable is a strength.
False.
Economic indicators becoming more favourable is an opportunity in most cases.
What is a weakness in a SWOT analysis?
A weakness is what a business does poorly, such as ways it lags behind competitors.
True or False?
A SWOT analysis is the same for all businesses at a specific point in time.
False.
A SWOT analysis will vary significantly for businesses of different sizes with different objectives and operating in different sectors.
Define the term threat.
A threat is a hazard that has the potential to damage business performance.
True or False?
A loyal customer base and effective leadership are examples of opportunities.
False.
A loyal customer base and effective leadership are examples of strengths.
What is the purpose of PESTLE analysis?
PESTLE analysis examines the external factors that are likely to impact the activities and outcomes of a business.
What does the acronym PESTLE stand for?
PESTLE stands for:
Political
Economic
Social
Technological
Legal
Environmental
What is meant by a political factor in PESTLE Analysis?
A political factor is the extent to which local and national government decisions and attitudes are expected to influence a business.
What is meant by an economic factor in PESTLE analysis?
An economic factor is the extent to which economic indicators such as inflation and exchange rates are expected to directly impact business performance.
What is meant by social factor in PESTLE analysis?
A social factor is the extent to which personal attitudes and values, culture and demographic change are expected to affect the business.
True or False?
PESTLE analysis can support effective decision-making by senior managers.
True.
PESTLE analysis can support effective decision-making by senior managers, who will better understand the complex context within which the business operates.
What is meant by legal factors in PESTLE analysis?
A legal factor is the extent to which changes in law and regulations are expected to impact a business.
True or False?
Changing patterns of migration are an example of an environmental factor in PESTLE analysis.
False.
Changing patterns of migration are an example of a social factor in PESTLE analysis.
True or False?
A rise in the level of the national minimum wage is an example of a legal factor.
True.
A rise in the level of the national minimum wage is an example of a legal factor, though it is determined by the government, so it could also be a political factor.
True or False?
A rising level of unemployment is an example of a social factor in PESTLE analysis.
False.
A rising level of unemployment is an example of an economic factor in PESTLE analysis, though it is likely to have social consequences.