1.

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VISSION MISSION
-Image of ideal situation in the future -States clear purpose
-what do we want to become -what is our business
-long term (very) -medium or long term
-not usually updated -updated usually
-don’t need to be actual targets\ -outline of values of the buisness
-can be achieved
-

MISSION STATEMENT:

-underlying firms pupose of existence and core values

-has no time frames
-qualitative
-well defined, realistic, achievable
-has sense of direction
-unifies people for a certain target to corporate

 objective of every firm is to maximize profit

 mission and objective

 diff: mission no distant time frame its qualitative insteadof quantitive

 vision statements are time consuming

 bes thought out statements may not be interested by stakeholders

 STEPS IN SETTING MISSION STATEMENTS:

 -aims are general and longterm goals

 they are vague and unquantifiable

 -objectives are short to long term,they help to achive aims and are specific
and quantifiable

 -aims and objectives help to mrasure And control plans , gives sense of
direction what it wants to be

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  -to motivate the empoyees
 -help to inspire and achieve goals
 unity
 -help to think strategically
 -to direct, provides focus

 objective
 -quantifiable
 -what business needs to do
 not option
 -set by managers or subordinates

 Strategies:
 -plans of actions to achieve the strategic objectives to achieve the aims
 and TACTICs
 -short term methods to achieve the tactical objectives
 both help to achive objective

 operational: day to day methods

 Generic: affect business as a whole eg competitors
 Corporate: long term goals

 Tactical objectives
 -short teerm goals that affect a section of the organization
 -guide certain sections
 -specific goods
 but impacts long term
 for survival: new will get more problems, no recognition and competition
and sales revenue maximization: goal from day one only after estabilishes
business
MAIN GOAL OF BUISNESS

 survival
 sales revenue p b90
 Profit maximization
 Growth
 Market standing
 Image and reputation

NEED TO CHANGE OBJECTIVES (Internal Factors)

 By change of external or internal environment

 1. Corporate culture- laws
 2. Type and size of organization- eg to soletrader to partnership
 3.Private V/S public sector – if the business changes
 4.Age of the business – if new then survival number 1 , cutting cost
 5. Risk Profile- if wanna take risk then only can set high objectives

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 finance- if not enough money to set objective so set accordingly
 Crises management- hwo does business deal w probs, if cant
handle then the objectives should be low

(Extrnal Factors)

 State of the economy- eg inflation

 Government constraints: rulesand regulations, eg
environment
 The presence and power of pressure groups: they force to
revaluvate approach of business to ethics , they can affect
the firms image, if not adopting responsible approach
 New technologies-new innovations and techs can more
oppotun

Ethical objectives- moral principles that guide decision-

making and strategies. Eg reducing pollution

CSR
Corporate social responsibility
Efficient
Contributions to society

 Provide accurate information and labeling

 Fair employment practices
 Consideration for environment
 Community work

 Society
 Stakeholders
 Media
 Pressure groups

SWOT ANALYSIS:

 Strength: internal, favourable

compared orwhat gives u an
edge
 Weakness:internal
unfavourable and is a
disadvantage
 Opportunities: external the
scope for developmen
 Threats: external cause
problems, barriers

Why do use SWOT?

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 1)competitor analysis
2)assessing opportunities
3) risk assessment
4) reviewing corporate strategy
5)strategic planning

 Ansoff matrix- is an analytical tool that helps managers to choose and

devise various products and market growth strategies

 Existing markets selling existing products= market penetration

 Existing products sold in existing market = market development
 Existing market selling new products= product development
 Existing products sold in new markets= diversification

 Market penetration- same products for existing customer, low risk, seek
to maintain or increase market share, intense comp

 Product development- new products for existing customers, moderate

risk,innovation to replace the old products , product improvement

 Market development- new customers for existing products-, moderate

risk, entering overseas market, new distribution channels

 Diversification- new products for new customers,high risk, spreading

risks, use of subsidiaries and strategic business units

SMART OBJECTIVES

o Smart: Specific (not vague, realistic)

o Measurable:
o Achievable:
o Realistic
o Time

o Strategies can be used to achieve these objectives

o Respect different cultures

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1.4 STAKEHOLDERS
INTERNAL STAKEHOLDERS:

 A stakeholder is any person or prganisation with a direct

interest in, and is affexcted by, the activities and performance
of a business
 members of organization eg manager employees

 EMPLOYEES
 Have a stake aka an interest
 They will strive to improve pay,working conditions and
job security and oppo
 Produce and communicate for customers
 Motivate better output

 MANAGERS AND DIRECTORS

 Oversee daily operation of business
 Direct business on behalf of owners (they are
elected)
 Aim to maximize their bonuses
 Look at long term financial health

 SHAREHOLDERS:
 Limited liability companies owned by them
 Invest money by buying shares
 Vote and say how company runs
 2 objectives: maximize didvidents and to achive a
capital gain in the value of the shares (rise in share
price)

EXTERNAL STAKEHOLDERS:
 Arent a part of the business but have a direct
interest and involvement

 CUSTOMERS
 CAN SPEND ELSE WHERE THREATENING BUISNESS
 Listen to option of customers
 The most important part
 If they hppy then yay

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 Market research producers identify customer needs and
wants In order to satisfy creates brand loyalty and more
customers

 SUPPLIERS
 Need to make a product and supply it
 Good relationship as yiu need credit, can deffer payments
instead of cash flow probs
 Cred terms can be longer
 On time and quality goods
 GOOD COMMUNICATION

 PRESSURE GROUPS
 To be ethical
 Consists of individuals that come together w a common
agenda to achieva a goal in ider to help society
 Good relations w them so they don’t bitch
 May pressure to sponcer local fund raising events

 COMPETITORS:
 THEY ARE RIVALS
 Give incentive to workharder
 To be better
 To be aware of what rival is up to
 benchmark

 GOVN:
 Import
 They influence a lot
 That no unfair business practices
 Tax paid from each
 Health and safety standards
 Consumer protection law are upheld
 Competition policies
 Small business survive
 Aims to ensure they act in publics interest

STAKEHOLDER CONFLICT

 NOT EVERYONE THINKS THE SAME WAY

 Firm give up on some profit so consumers be happy

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  More price to maximize profit
 Consumers v/s producers
 Consumer want low price high quality good
 Producer v/s employes
 Producer v/s PG
 Produvers v/s govt


STAKEHOLDERS AND CUEGIS CONCEPTS

1.5
 STEEPLE
 Its all external

SOCIAL
TECHNOLOGICAL
ECONOMIC
ENVIRONMENTAL
POLOTICAL
LEGAL
ETHICAL

 Boom is a period of time when the economic activity is

high
 Ouput high
 Gdp is high
 Economic high
 Then recession starts
 Cut down on output and price
 Reduce cost
 No consumer spending
 Gdp vv low
 Fall in gdp for 6 months = recession
 Slump is the lowest point
 Unemployment low , low gdp low invest ment

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  Recovery stage; getting back, more invest ment,
sunsidies

 Economic growth: gdp
 Economic development: standard of living

 Govt avoid a dficit in international trade

 To correct imbalance they alter the exchange rate
 ^ exchange rate means export rate higher W

FISCAL: taxes and government expenditure

MONETARY: interest rates and money

o Consumer protection legislation

o Employee protection legislation
o Competition legislation
o Social and environmental legislation

ETHICAL
o Employees will ike towork in this business
o Motivational
o Attracts
o Expensive
o Profits reduce
o

Business cycle refers to the fluctuation in the level of business

activity over time. Countries tend to move through the cycle of
booms, recessions, slumps, recovery and growth.

Deregulation is the removal of government rules and regulations

which constrain an industry to enhance efficiency and encourage
more competition within the industry.
Economic growth measures changes in the Gross Domestic Product
of a country over time. It occurs if there is an increase in GDP for two
consecutive quarters.

Ethics are the moral values and judgements (of what is right) that

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society believes businesses ought to consider in their decision-making.
The exchange rate is the value of a country's currency in terms of
other currencies.

Inflation occurs when the general price level in an economy

continuously rises. It is measured by changes in the cost of living for
the average household in a country.

Interest rate is a measure of the price of money in terms of the

amount charged for borrowed funds or how much is offered on
money that is saved.

Protectionist measures are any measure taken by a government to

safeguard its industries from overseas competitors. They are a threat
to businesses trying to operate in foreign markets.
STEEPLEanalysis is an analytical framework used to examine the
opportunities and threats of the external environment (social,
technological, economic, environmental, political, legal, and ethical
environments) on business activity.
Unemployment refers to the number of people in the workforce who
are willing and able to work but cannot find emplo

They are often expressed as SMART objectives.

SMART objectives are targets that are specific, measurable,
achievable, realistic and time constrained.

Strategies are plans of action that businesses use to achieve their targets, i.e.
the long-term plans of the whole organization.
SWOT analysis is an analytical tool used to assess the internal
strengths and weaknesses and the external opportunities and threats of
a business decision, issue or problem.

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Tactics are the short-term plans of action that firms use to achievetheir
objectives.
A vision statement is an organization's long-term aspirations, i.e. where it
ultimately wants to be.
KEY TERMS

thefirmsmissionstatement.Theyareageneralstatementofa firm's
purpose or intentions and tend to be qualitative in nature.
The Ansoff matrix (1957) is an analytical tool to devisevarious
product and market growth strategies, depending on whether
businesses want to market new or existing products in either new or
existing markets.

Corporate social responsibility (CSR) is the conscientious consideration of

ethical and environmental practices related to business activity. A
business that adopts CSR acts morally towards its various
stakeholder groups and the wellbeing of society as a whole.

An ethical code of practice is the documented beliefs and philosophies of an

organization.
Ethicsarethemoralprinciplesthatguidedecision-makingand strategy.
Morals are concerned with what is considered to be right or wrong,
from society's point of view,
A mission statement refers to the declaration of an organization's overall
purpose. It forms the foundation for
setting the objectives of a business


Strategies are plans of action that businesses use to achieve their targets, i.e.
the long-term plans of the whole organization.
SWOT analysis is an analytical tool used to assess the internal
strengths and weaknesses and the external opportunities and threats of
a business decision, issue or problem.

Tactics are the short-term plans of action that firms use to achievetheir

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objectives.
A vision statement is an organization's long-term aspirations, i.e. where it
ultimately wants to be.

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