3.1.1 | Corporate Objectives
Business Aims
- Things which the business intends to do in the long term, or its reason for being
- Usually less specific than objectives
- Communicate aim through mission statement
Mission Statements
Mission Statement – A statement which declares the businesses overriding purpose, and also its
goals and values.
- Good statement helps guide the owners and the staff
Reasons for a Mission Statement
- To make a commitment to customers on expectations
- To bring a companies workforce together with a purpose
Examples of Mission Statements
- ‘We improve levels of fitness by providing individual plans for people of all ages and help them
to achieve their aims’
- ‘To help create practical and beautiful homes for our customers
Development of Corporate Objectives
Corporate Objectives – Objectives set by senior managers and directors for a company which
are specific to the company.
- Focused mainly on desired performance and wanted results over time
- Can include goals as market share, profit levels, creation of new products, resource usage and
scale economies.
Smart Criteria
Specific
- Must be clear and refer to a specific part of the business
Measurable
- Must be able to know whether the objective has been achieved or not, most will be financial so
its easy
Agreed
- The objective should be able to have a meaning for the employees and the managers and so
the objective should be agreed by everyone
Realistic
- if the objective is impossible then there will be no motivation to hit it because it feels as if it
cannot be done
Time
- A timing is important to help push yourself and employees towards the goal
,Departmental and Functional Objectives
- These are usually very specific and are day-to-day goals for different departments, which
support the achievement of corporate objectives
Types of Departments
- Finance
- Administration
- Production
- Operations
- HR
Examples
- ‘We aim to achieve a market share increase of 10% within the next year
, 3.1.2 | Theories of Corporate Strategies
Development of Corporate Strategy
- Involves key members of management looking at what the business has done before and what
it may need to do to achieve its corporate objectives.
- Tools like value chain analysis, Ansoff’s Matrix, Porters Strategic Matrix and portfolio analysis
help to do this
Ansoff’s Matrix
- Igor Ansoff developed the Ansoff’s Matrix as a tool to help business growth
- Ansoff’s Matrix reveals four possible strategies that a business might adopt
- The further it gets from its core and existing market and products, the more risk
Market Penetration
- To achieve growth in existing markets with existing products
- Very low risk and low investment due to good understanding already
Done by:
- Increase brand loyalty
- Encourage more usage of product
Product Development
- New product in existing market
- Good for dynamic markets
- E.g Apple
- Significant investment and high risk
Market Development
- Existing product in new market
- Relies on understanding local habits, tastes and needs.
- Necessary to make slight modifications to suit the new market
Diversification
- New product in a new market
- Extremely risky and very expensive
Business Aims
- Things which the business intends to do in the long term, or its reason for being
- Usually less specific than objectives
- Communicate aim through mission statement
Mission Statements
Mission Statement – A statement which declares the businesses overriding purpose, and also its
goals and values.
- Good statement helps guide the owners and the staff
Reasons for a Mission Statement
- To make a commitment to customers on expectations
- To bring a companies workforce together with a purpose
Examples of Mission Statements
- ‘We improve levels of fitness by providing individual plans for people of all ages and help them
to achieve their aims’
- ‘To help create practical and beautiful homes for our customers
Development of Corporate Objectives
Corporate Objectives – Objectives set by senior managers and directors for a company which
are specific to the company.
- Focused mainly on desired performance and wanted results over time
- Can include goals as market share, profit levels, creation of new products, resource usage and
scale economies.
Smart Criteria
Specific
- Must be clear and refer to a specific part of the business
Measurable
- Must be able to know whether the objective has been achieved or not, most will be financial so
its easy
Agreed
- The objective should be able to have a meaning for the employees and the managers and so
the objective should be agreed by everyone
Realistic
- if the objective is impossible then there will be no motivation to hit it because it feels as if it
cannot be done
Time
- A timing is important to help push yourself and employees towards the goal
,Departmental and Functional Objectives
- These are usually very specific and are day-to-day goals for different departments, which
support the achievement of corporate objectives
Types of Departments
- Finance
- Administration
- Production
- Operations
- HR
Examples
- ‘We aim to achieve a market share increase of 10% within the next year
, 3.1.2 | Theories of Corporate Strategies
Development of Corporate Strategy
- Involves key members of management looking at what the business has done before and what
it may need to do to achieve its corporate objectives.
- Tools like value chain analysis, Ansoff’s Matrix, Porters Strategic Matrix and portfolio analysis
help to do this
Ansoff’s Matrix
- Igor Ansoff developed the Ansoff’s Matrix as a tool to help business growth
- Ansoff’s Matrix reveals four possible strategies that a business might adopt
- The further it gets from its core and existing market and products, the more risk
Market Penetration
- To achieve growth in existing markets with existing products
- Very low risk and low investment due to good understanding already
Done by:
- Increase brand loyalty
- Encourage more usage of product
Product Development
- New product in existing market
- Good for dynamic markets
- E.g Apple
- Significant investment and high risk
Market Development
- Existing product in new market
- Relies on understanding local habits, tastes and needs.
- Necessary to make slight modifications to suit the new market
Diversification
- New product in a new market
- Extremely risky and very expensive
