7.1 Mission, Objectives and Strategy (AQA A Level Business): Flashcards
Exam code: 7132
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Define a mission statement.
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Cards in this collection (56)
Define a mission statement.
A mission statement outlines the fundamental purpose and reason for a business's existence — what it does, who it serves and how it adds value.
Define a vision statement.
A vision statement sets out a business's ambition — the position it hopes to achieve in the future.
What is the key difference between a mission and a vision?
A mission states why the business exists now; a vision is forward-looking — where it hopes to be in the future.
Give two influences on a business's mission.
The values of owners/founders and societal views (also employee values, industry characteristics, corporate objectives, legal form and regulation).
How can new owners change a mission?
They can rewrite it overnight — e.g. when Musk bought Twitter (2022) he renamed it X and changed its mission.
How does a business's legal form influence its mission?
Public-sector bodies focus on public service; not-for-profits focus on a cause rather than commercial gain.
Define corporate objectives.
Corporate objectives are quantifiable, specific performance goals set by senior management for the medium-to-long term (also called strategic objectives).
Give two influences on corporate objectives.
Pressures for short-termism and business ownership (also the external and internal environment).
What is short-termism?
Pressure to hit profit targets or raise the share price quickly, even when this conflicts with long-term investment.
How can the external environment affect corporate objectives?
A recession can switch objectives from growth to survival, and rapid technological change creates new opportunities or challenges.
What do corporate objectives provide the basis for?
The functional objectives set by areas such as marketing, finance and operations.
A vision statement is forward-looking and intended to stakeholders.
A vision statement is forward-looking and intended to inspire stakeholders.
True or False?
A mission statement describes where a business hopes to be in the future.
False.
That is a vision statement; a mission describes why the business exists now.
True or False?
Corporate objectives are also known as strategic objectives.
True.
They are quantifiable goals set by senior management for the medium-to-long term.
Define corporate objectives.
Corporate objectives are the long-term goals set by senior management that flow from the mission.
Define functional objectives.
Functional objectives are department-level targets that support corporate objectives.
Define strategy.
Strategy is the medium-to-long-term plan of action showing how the business will meet its corporate objectives.
Define tactical decisions.
Tactical decisions are short-term, day-to-day choices that put the strategy into practice.
What is the order of the mission-to-tactics hierarchy?
Mission → corporate objectives → corporate strategy → functional objectives → tactical decisions.
What does the mission state, versus corporate objectives?
The mission states why the business exists; corporate objectives translate that into specific, measurable targets.
Why are mission, objectives, strategy and tactics linked?
For alignment and focus, clarity and accountability, and flexibility to adjust tactics without rewriting strategy.
Give two differences between strategy and tactics.
Strategy is long-term and organisation-wide; tactics are short-term and focused on specific functions.
Who is responsible for strategy versus tactics?
Strategy: senior management. Tactics: middle and lower management.
Does strategy answer 'what and why' or 'how'?
Strategy sets what the business will do and why; tactics show how each team delivers it.
Tactical decisions are short-term and easily if conditions change.
Tactical decisions are short-term and easily adjusted if conditions change.
True or False?
Tactics are broad, organisation-wide plans measured in years.
False.
That describes strategy; tactics are narrow, specific and measured in days, weeks or months.
True or False?
Functional objectives are shorter-term and more detailed than corporate objectives.
True.
Each department sets its own shorter-term, more detailed objectives to deliver the strategy.
Define strategic decisions.
Strategic decisions are long-term, high-level choices that set the overall direction of the whole business.
Define functional decisions.
Functional decisions are day-to-day or medium-term choices within a single department that support strategy.
Who makes strategic versus functional decisions?
Strategic: senior management (board/CEO). Functional: middle managers or department heads.
What is the typical timescale of strategic versus functional decisions?
Strategic: 3–5 years or more. Functional: months, up to about a year.
Give an example of a strategic decision.
Entering a new country — e.g. a UK supermarket opening stores in Spain.
Give an example of a functional decision.
Setting a promotional campaign — e.g. the marketing department planning next year's TV adverts.
Give two internal influences on functional objectives.
Corporate objectives/strategy and available resources (also structure, culture/leadership, staff skills and internal data).
How do available resources influence functional objectives?
Budgets, staff, equipment and technology set the limits of what each function can realistically do.
How does company culture influence functional decisions?
A risk-taking culture encourages bold plans, while a cautious culture sticks to tried-and-tested approaches.
Give two external influences on functional objectives.
Economic conditions and competitor actions (also technological change and the legal environment).
How might a recession affect functional objectives?
Marketing cuts advertising, operations cuts production targets, and finance reduces credit offered to customers.
How does technological change affect functional objectives?
IT/operations plan new systems, HR trains digital skills, and marketing focuses on e-commerce.
Strategic decisions focus on the whole organisation and its in the market.
Strategic decisions focus on the whole organisation and its position in the market.
True or False?
Functional decisions are made by senior management such as the board of directors.
False.
They are made by middle managers or department heads; senior management makes strategic decisions.
True or False?
Strategic decisions typically have a timescale of 3–5 years or more.
True.
They are long-term choices setting the overall direction of the whole business.
Define SWOT analysis.
SWOT analysis is an analytical tool identifying internal strengths and weaknesses and external opportunities and threats.
What do the four letters of SWOT stand for?
Strengths, Weaknesses, Opportunities and Threats.
Which parts of SWOT are internal, and which are external?
Strengths and weaknesses are internal; opportunities and threats are external.
How does SWOT analysis help managers?
It helps them understand the current position and likely future changes, so appropriate strategic decisions can be made.
Give two factors affecting the usefulness of a SWOT analysis.
The quality/relevance of data and objectivity/bias (also depth of analysis, stakeholder involvement and the changing environment).
Why must a SWOT analysis be updated regularly?
The business environment changes (market, technology, preferences), so the identified factors shift over time.
Give an example of a strength in SWOT.
Skilled staff, patents/IP, a loyal customer base or effective leadership.
Give an example of a weakness in SWOT.
Lagging behind competitors, resource/capital limits, no USP or a poor online presence.
Give an example of an opportunity in SWOT.
Developing markets, few competitors, favourable legal/economic change or new technology creating demand.
Give an example of a threat in SWOT.
Emerging competitors gaining market share, unfavourable legal/economic change, product obsolescence or negative press.
Once a SWOT is done, what should a business do with strengths and threats?
Harness strengths and mitigate threats (while seizing opportunities and eliminating weaknesses).
In SWOT, anything the business directly controls is a strength or , not an opportunity or threat.
In SWOT, anything the business directly controls is a strength or weakness, not an opportunity or threat.
True or False?
In SWOT analysis, opportunities and threats are internal factors.
False.
Opportunities and threats are external; strengths and weaknesses are internal.
True or False?
A new competitor gaining market share is best classed as a threat.
True.
It is an external hazard to business performance, so it belongs under threats.
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