Theme 3

• Mission statements


  Declares the businesses purpose, but also reflects its aims and goals
• Corporate Objectives


  Objectives set by senior managers and directors that are specific to the company and its vision for its future
• Functional Objectives


  The objectives of a department within a business
• The 4 Functions within a business

  Marketing, Finance, Operations, Human Resources
• Criticisms of Mission Statements and Corporate aims

  Need to be up to date and aligned with the business otherwise, if employees don't follow it, customers may lose faith in the business
• Ansoff's Matrix

  • Market penetration
  • Product Development
  • Market Development
  • Diversification
• Market Penetration


  To achieve growth in existing markets with existing products
• Product Development

  Marketing new products in existing markets
• Market Development

  Marketing existing products in existing markets
• Diversification

  Where new products are developed for new markets
• Porter's Strategic Mix

  • Cost-Leadership
  • Differentiation
  • Focus
• Cost-Leadership

  Striving to be the lowest cost provider in a market
• Differentiation

  When a business operates in a mass market but adopts a USP
• Focus

  Targeting customers in a niche market

  Cost focus - empasising cost minimisation

  Differentiation focus - pursuing different strategies in a focused market
• Distinctive Capability

  A strategy that is difficult for competitors to copy or imitate.

  Architecture, Reputation, Innovation
• Architecture

  Refers to the contracts and relationships around an organisation, including between the employer and employees
• Reputation

  Refers to the positive associations a business builds around quality, reliability and service
• Innovation


  Refers to the strong competitive advantage a business gets when they develop a new product or process
• Portfolio analysis

  Categorises all of the products and services of a firm to decide where they fit into strategic plans
• Stars

  High market growth and high market share
• Cash cows

  Low market growth and high market share
• Question Marks

  High market growth and low market share
• Dogs

  Low market growth and low market share
• Strategy

  The long term direction that a business will take to achieve its objectives
• Tactics

  The short term direction taken in response to a threat or an opportunity
• SWOT analysis

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats
• Strengths (Internal)

  What a business is good at. E.G. a highly motivated and loyal workforce
• Weaknesses (Internal)

  What a business is bad at. E.G. poor cash flow
• Opportunities (External)

  The openings a business can take to improve themselves. E.G. a new overseas market opening up
• Threats (External)

  The possible hazards and risks that could damage a business. E.G. a new entrant in the market
• PESTLE analysis

  A way of analysing external factors that may influence business activity of performance

  • Political
  • Economic
  • Social
  • Technological
  • Legal
  • Environmental
• Impact of a changing political environment

  • New entrants
  • New products
  • Consolidation
• Porters Five Forces

  The five factors that determine the profitability of a market

  • Bargaining power of suppliers
  • Bargaining power of buyers
  • Threat of new entrants
  • Substitutes
  • Rivalry among existing firms