3.1 business objectives and strategy

• business aims


  the long term goals of the business
• mission statement


  expression of a business' overall aim, expressing core values and context
• corporate objectives


  specific performance goals set by senior management
• functional objectives


  day to day goals that are aligned across departments to help achieve their shared goal
• critical appraisal


  assesses is the corporate aims and mission statement continue to reflect the current corporate vision
• ansoff's matrix


  used to identify appropriate corporate strategy and the level of risk associated

  
• market penetration


  selling more products to existing customers by encouraging more frequent use of the product
• market development


  new market opportunities for existing products (abroad/different demographics)
• product development


  selling new or improved products to existing markets
• diversification


  targeting new markets with new or redeveloped products
• distinctive capabilities


  a skill or attribute possessed by a business
• strategic decisions


  long term and relates to achieving the overall goal
• tactical decisions


  short term actions that help to achieve the strategy
• porter's generic strategic matrix

  considers the business' source of competitive advantage and the scope of the market in which it operates

  
• cost leadership


  being the most cost-competitive business in a mass market
• cost focus


  the lowest cost competitor within a niche market
• differentiation focus


  offering specialised products within a niche market
• portfolio analysis


  detailed evaluation of its full range of products to identify appropriate strategies
• SWOT analysis


  analytic tool to identify strengths, weaknesses, opportunities and threats
• PESTLE analysis


  Political

  Economic

  Social

  Technological

  Legal

  Environmental
• fiscal policy


  use of government spending and taxation to influence the economy
• social mobility


  progression from one class to another, higher class within society
• intellectual property


  products that are protected by patents/copyrights
• porters five forces


  threat of new entry, buyer power, supplier power, threat of substitution, competition
• industry rivalry (competition)


  when there are many competitors selling similar products, the business has little power
• threat of new entry


  how easily new competition can enter the market due to barriers to entry
• barriers to entry


  the costs or other obstacles that prevent new competitors from easily entering an industry
• buyer power


  customers ability to negotiate lower prices depending on the number of customers the business sells to
• supplier power


  suppliers ability to charge premium prices depending on the number of choices of supplier a business has
• threat of substitution


  customers ability to swap products for those of the competition