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3.1 / Business objectives and strategies - Coggle Diagram
3.1 / Business objectives and strategies
corporate objetives
hierarchy of objectives
aims
what is a business looking to achieve in the long term
expressed as a overall vision
misson statment
an expression of the businesses overall aim as well as its core values and context
corporate objectives
specific performance goals over time made from the companies overall aim
functional objectives
day to day goals within departments to help work to the overall goal
SMART goals
specific
measurable
achievable
realistic
time bound
critical appraisal
aims may change due to business growing and social change
make sure they actually correlate with company
"PR stunt"
theories of corporate stratergy
Development of corprate stratergy
A successful corporate strategy helps to provide a competitive advantage
requires careful consideration of a range of internal factors
and the external environment in which the business operates
Internal factors include the human and capitalresources available
External factors include the economic and political environments
Ansoff's matrix
Ansoff’s Matrix is a tool for businesses with a growth objective
new/existing product
new/existing market
The least risky strategy to achieve growth is to pursue a strategy of market penetration
Market development involves expanding and exploiting new market opportunities for existing products
Product Development involves selling new or improved products to existing customers
Diversification is the most risky growth strategy as it involves targeting new customers with entirely
new or redeveloped products
Porter’s Generic Strategic Matrix
divided into
cost / differentiation
mass / niche
Porter argues that failing to adopt one of these strategies risks a business being ‘stuck in the middle and unable to compete successfully with rivals in the market
operating in a mass market
Businesses that have a significant cost advantage over competitors should exploit this as much as possible to achieve success. This is called cost leadership
Businesses that are unable to operate as the most competitive on cost should adopt a strategy of differentiation
operating in a niche market
A cost focus involves being the lowest cost competitor within the market niche
A differentiation focus involves offering specialised products within the niche market
portfolio analysis
Portfolio analysis involves a business carrying out a detailed evaluation of its full range of products in order that appropriate strategies may be identified and pursued
Boston box matrix
helps group a companies products into categories
Stars are products sold in high-growth markets and have a high level of market share
Cash Cows are sold in lower-growth markets and have a high market share
Question Marks are sold in high-growth markets and have a relatively low market share
Dogs are sold in low-growth markets and have a relatively low market share
Achieving Competitive Advantage Through Distinctive
Capabilities
Operational skills and expertise within the
business
Relationships and networks established
within and around the business
Reputation and image of the business
Innovation and the ability to change
SWOT analysis
SWOT Analysis is an analytical tool used by businesses to identify
Internal strengths and weaknesses
External opportunities and threats
Once a SWOT Analysis has been completed by a business, decisions can be made to improve performance
Strengths should be harnessed
Weaknesses should be eliminated
Opportunities should be seized
Threats should be mitigated
impact of external influences
PESTLE analysis examines the external factors that are likely to impact the activities and outcomes of a business
Pestle
Political
The extent to which local and national government is expected to influence the business including
Economic
The extentto which economic indicators are expected to directly impact business performance including
Social
The extent to which personal attitudes and values, culture and demographic change are expected to affect the business including
Technological
The extent to which technological change and innovation are expected to impact the business including
Legal
The extent to which changes in law and regulations are expected to impact the business including
Environmental
The extent to which changes in attitudes and government policy towards environmental protection as well as the impact of global warming expected to impact the business including
supports decision making for long term as it helps managers understand position of business
The Changing Competitive Environment
The structure of the market in which a business operates is likely to change over time
businesses leave and the market
growth of the internet
changes in consumer taste
changes in regulatory frame work
globalisation
Porter’s Five Forces
Porter’s Five Forces identify the key pressures on an industry that impact the ability of a business to compete with rivals
competition
When there are many competitors selling similar products, the business will have little power
threat of new entry
If new competitors can enter an industry quickly and without investing a lot of money, then the barriers to entry is low and the threat is high
customer bargining power
When a business sells to a small number of customers, those customers have significant power to negotiate lower prices
supplier bargaining power
Where a supplier has significant power over a business as a result of offering a specialised component or where there is a small number of suppliers in the market
threat of substitution
Where customers can easily swap a businesses products for those of a rival, the business has little power
