3.1 Business Objectives+Strategy

• Mission Statement

  a briefly written statement which show main corporate aims of a business and summarises it’s long term direction
• Corporate Aim

  long term targets of a business from the objectives they have set, tends to be general direction of where business is heading
• Corporate Objective

  refers to goals set by a firm which express the strategic intent of senior management.

  providing clear direction for all decision and activities
• Business Strategy

  carefully thought through plans which help he business achieve their objectives
• Business tactic

  considers how the business will achieve its strategy. tend to be short term and reactive to potential threats
• Ansoffs Matrix: A tool for identifying and evaluating the potential for growth in a business.
• Market Penetration

  strategy of business growing by targeting existing products in existing markets

  Works well when there's a high market share potential

  Requires effective marketing activities
• Market Development

  business seeking to grow by targeting existing products in new markets

  Useful when domestic market saturates

  Risks related to unfamiliar markets and cultures
• Product Development

  business seeking to grow by targetting new products in existing markets

  requires constant innovation and research
• Diversification

  business seeking to grow by targeting new products in new markets

  Riskiest strategy however brings the most rewards
• Porters Strategic Matrix

  believes best competitive advantage is either through developing cost-leadership or differentiation strategies
• Boston Matrix - A tool used to compare the relative attractiveness of a product or service
• Star - High market share High market growth - generates significant revenue
• Question Mark - high market growth but low market share. Potential to be a star
• Cash Cow - high market share but low growth rate
• Dog - low market share and low growth rate
• Competitive Advantage - Features of a business which are perceived by customers to be distinct and superior to its competitors. Porter believed these should be low-cost and differentiation.
• SWOT Analysis - Strengths, Weaknesses, Opportunities, Threats. Use to consider business sttrategies.
• PESTLE

  An audit which focuses on external issues that can provide both opportunities and threats to a business, including political, economic, social, technological, legal and environmental issues
• Porters Five Forces - Competitive rivalry, power of suppliers, power of customers, threat of substitutes, threat of new entrants
• Choice of strategy depends on:

  • size of company
  • market conditions
  • customer demands
  • competitor actions
• Common business objectives:

  • profitability
  • market share expansion
  • business growth
  • customer retention
• Managers can use SWOT analysis to analyse internal and external environment upon deciding business strategy
• Corporate objectives can be related to:

  • profits
  • growth
  • market share
  • corporate image
  • employee welfare
  • customer satisfaction
• • Survival may also be a corporate objective, especially during economic downturns, financial crises, or periods of intense competition.
• potential conflict between different corporate objectives, primarily between profit objectives and social and ethical objectives.
• Objectives should be SMART

  • Specific,
  • Measurable,
  • Achievable,
  • Relevant,
  • Time-bound
• Corporate Objectives should also be adaptable to:

  • changing external environments
  • competitor strategies
  • changes in consumer behaviour
  • legal changes