Chapter 7: Strategic Planning Part 2 Flashcards Preview

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Flashcards in Chapter 7: Strategic Planning Part 2 Deck (12)
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1
Q

Swot Analysis

definition

A
  • Used to gather and categorise information about business opportunity, new market, strategy formulation and change
  • Evaluate internal and external environment
  • SW will determine how well a business can respond to OT
2
Q

SWOT:

Strength

A
  • Internal characteristics of the business that give it advantage over the others and contribute to business success
3
Q

SWOT:

Weakness

A
  • Internal characteristic of the business that puts it at a disadvantage over the others and cause barrier to business success
4
Q

SWOT:

Opportunities

A
  • External condition, events or change that could create opportunities for a business to succeed and grow
5
Q

SWOT:

Threats

A
  • External elements in the environment that could cause trouble for the business or project
6
Q

PEST

definition

A
  • Used to analyse the marco environment of the business

- Each factor is used to analyse their impact on the business

7
Q

Porter’s 5 Forces

definition

A
  • Explains an industry’s level of competition

- The strength of the forces determines how easy it is to compete in a market

8
Q

Porter’s 5 Forces:

Threats of New Entrants

A
  • How easy it is for new business to enter the industry
  • If it is easy to enter the industry, competition will increase
  • If IP of product is not protected or supplies are easy to obtain, it makes it easier for competitors to sell the same products
  • Time and cost of entry
9
Q

Porter’s 5 Forces:

Bargaining Power of Supplier

A
  • Amount of pressure suppliers can put on the business to increase the price of supplies, affecting CoP and profitability
  • Number of suppliers
  • Uniqueness of service
10
Q

Porter’s 5 Forces:

Bargaining Power of Buyer

A
  • Amount of pressure that buyers can put on business to reduce price
  • Strongest effect on pricing when they are organised and collectively account for much of the product’s income
  • Number of buyers
  • Cost of changing
11
Q

Porter’s 5 Forces:

Threats of Substitutes

A
  • Products or services in another industry that customers can go to as it provides similar benefits
  • Number of substitutes
  • Cost of changing
12
Q

Porter’s 5 Forces:

Level of Competition

A
  • Intensity of competition between existing firms in the industry
  • Highly competitive industry would have low earnings as cost of competition is high
  • Number of competitors