3.1 – Business Objectives & Strategy

3.1.1 – Corporate Objectives

1. a) Development of corporate objectives from mission statement/corporate aims:

Explanation: Corporate objectives are derived from a company’s mission statement and corporate aims, guiding the strategic direction and helping in decision-making. They are specific, measurable goals that a business aims to achieve over a set period.

1. b) Critical appraisal of mission statements/corporate aims:

Explanation: Critically appraising mission statements and corporate aims involves evaluating their clarity, relevance, and alignment with the business’s values and the market realities. It helps in ensuring that they are effectively guiding the business towards its goals.

3.1.2 – Theories of Corporate Strategy

1. a) Development of corporate strategy:

Ansoff’s Matrix:

Explanation: Ansoff’s Matrix is a strategic tool that helps businesses decide their product and market growth strategy through four options: market penetration, market development, product development, and diversification.

Porter’s Strategic Matrix:

Explanation: Porter’s Generic Strategies Matrix helps businesses choose a competitive strategy based on two dimensions: scope of the target market and source of competitive advantage, which can be cost leadership, differentiation, or focus.

1. b) Aim of portfolio analysis:

Explanation: Portfolio analysis aims to evaluate a company’s products or business units to allocate resources optimally and formulate strategies based on their market performance and potential.

1. c) Achieving competitive advantage through distinctive capabilities:

Explanation: Distinctive capabilities refer to unique strengths that allow a business to differentiate itself and gain a competitive advantage. It involves leveraging core competencies, resources, and capabilities to outperform competitors.

1. d) Effect of strategic and tactical decisions on human, physical, and financial resources:

Explanation: Strategic and tactical decisions can significantly impact a business’s resources. Strategic decisions shape the long-term direction, while tactical decisions deal with the implementation of the strategy, affecting the allocation and management of resources.

3.1.3 – SWOT Analysis

1. a) SWOT analysis:

Internal considerations: strengths and weaknesses:

Explanation: The internal considerations in a SWOT analysis involve identifying the business’s strengths and weaknesses, focusing on internal factors like resources, expertise, and processes.

External considerations: opportunities and threats:

Explanation: The external considerations in a SWOT analysis involve identifying opportunities and threats in the external environment, including market trends, competition, and regulatory changes.

3.1.4 – Impact of External Influences

1. a) PESTLE (political, economic, social, technological, legal, and environmental):

Explanation: PESTLE analysis helps businesses analyze the macro-environmental factors that can affect their operations and strategies, helping in proactive planning and risk mitigation.

1. b) The changing competitive environment:

Explanation: The competitive environment is dynamic, with changes influenced by various factors such as technological advancements, consumer preferences, and regulatory changes. Businesses need to adapt to remain competitive.

1. c) Porter’s Five Forces:

Explanation: Porter’s Five Forces framework helps businesses analyze the competitive forces in their industry, including the threat of new entrants, bargaining power of suppliers and buyers, threat of substitute products, and rivalry among existing competitors, to develop strategies that leverage their strengths and mitigate weaknesses.