Theme 3

• What is an Aim?

  A long term goal.
• What is an Objective?

  Steps to achieve aims.
• What is a mission statement?


  A businesses purpose and values.
• What is SWOT analysis?

  Assesses a businesses competitive strengths and external environment.
• What is PESTLE analysis?

  Assesses a businesses external environment.
• What does PESTLE stand for?

  Political

  Economic

  Social

  Technology

  Legal

  Ethics
• What is the Ansoff Matrix?


  Helps a business determine stratagies.
• Describe the ansoff matrix:

  Lable:

  A) Market development

  B) Diversifaction

  C) Market penetration

  D) Product development

  
• What is the Porters strategy matrix?

  Differentation and low costs are effective ways to gain competitive advantage.
• What is a strategic decision?

  Important and hard to reverse.
• What is a Tacticle decision?

  Short term responses to opportunities and threats.
• What are porters 5 forces:

  Threat of new entrants

  Bargaining power of suppliers

  Bargaining power of customers

  Threat of subsitutes
• Why do businesses grow?

  Achieve economies of scale

  Increase profits

  Increase market power
• What are 3 issues with growth?

  Poor communication

  Poor motivation

  Poor management
• What is a merger?

  2 firms agree to join forces.
• What is a Take over?

  One firm buys the majority of another shares to gain full control.
• What is verticle integration?

  A firm merges or takes over another in the same industry but in different production stage.
• What is backwards verticle integration?

  Buying out a suplier.
• What is foward verticle integration?

  Buying ouy a customer.
• What is horizontal integration?

  Firm buys out another in same industry and production stage.
• What is conglomerate integration?

  Firm buys another with no clear connection.
• What is inorganic growth?

  External growth eg. Takeover
• What is organic growth?

  Internal growth eg. expand
• Why does some businesses stay small?

  USP

  Customer service

  Flexiable
• What is extrapolation?

  Use trends to forecast the future.
• What is a corrolation?

  relationship between two variable.
• What is a independant variable?

  Factor which causes the dependant variable to change.
• What is a dependant variable?

  Variables that are influenced by the independant variable.
• What is a payback period?

  Time taken to repay initial investments.
• What is a average rate of return?

  Anual % return on an investment project.
• What is net present value?

  Calculates what a project will be worth in the future.
• What does a decision tree estimate?

  Probality of outcomes
• What is critical path analysis?

  Allows a project to be completed in the shortest possible time?
• What is power culture?

  Control radiates from the centre of the organisation.
• What is role culture?

  Managers have the most power and responsiblity.
• What is task culture?

  Teams are formed for project where the most expertise is the leader.
• What is persons culture?

  Power lies within everyone
• What is a Stakeholder?

  Someone who has an interest in the business.
• What is a shareholder?

  Someone who owns shares within a business or is interested in growing the value of the business.
• What is Short terminism?

  Business prioritises short term proformance than long term.