7.1 - Mission, corporate objectives, strategy

• Mission


  The overall purpose of a business
• Mission


  • Influenced by what the owners want the business to achieve, their personal values and beliefs, and what market opportunities there are
• Objectives


  The goals a business sets in order to achieve its mission
• Types of objectives


  • Corporate objectives (goals of the business as a whole)
  • Functional objectives (objectives of each department or function)
• Examples of objectives


  • Profit
  • Growth
  • Survival
  • Cash flow
  • Social/ethical performance
• Factors influencing objectives


  • Internal factors (ownership, short-termism, internal environment)
  • External factors (political, legal, economic, social, technological, environmental, competition)
• Strategy


  A medium to long-term plan of action developed to achieve a business's objectives
• A strategy can only be put into place once an organisation has outlined its aims and objectives</b>
• All businesses need to have a strategy
• Tactics


  Short-term plans for implementing strategy, focused on day-to-day activities
• Strategic decisions


  Long-term, high-risk decisions that determine the overall direction of the business
• Functional decisions


  Decisions made in individual departments to implement the overall strategy
• SWOT Analysis


  A four-factor model that details the strengths, weaknesses, opportunities and threats facing a business
• SWOT Analysis


  • Helps managers to make strategic decisions
• Strengths and weaknesses


  Internal factors that the business can influence
• Opportunities and threats


  External factors beyond the control of the business that the business has to understand in order to react appropriately
• External factors that might pose opportunities or threats

  • Political
  • Legal
  • Economic
  • Social
  • Technological
  • Environmental
  • Competitor behaviour
• SWOT analysis


  • Considers the business's individual circumstances
  • Done in a factual and objective way
• Planning strategy using SWOT analysis

  1. Focus on opportunities that build on the business's strengths

  2. Convert weaknesses into strengths

  3. Manage threats
• Advantage of SWOT analysis

  • Can easily be redone to take into account changing conditions
  • Means a business can adapt its strategy using the new SWOT analysis
• SWOT analysis


  • Lets the business know where it has a competitive advantage over its rivals
  • Business can change its strategy to focus on these elements
• SWOT analysis helps businesses to Plan Strategies