Strategy And implementation

Question 1

What is an internal audit

Answer 1

An internal audit allowed a business to sssess its strengths and weaknesses in relation to its competitors across the whole of the business

The purpose is to provide accurate information about each department like the levels of absenteeism or turnover provided by the Human Resources department

Question 2

What is an external audit

Answer 2

An external audit looks at opportunities open to the business and the threats which it faces in the external environment

These can be technological changes, law changes, political influences, environmental issues or ethics

Question 3

How can political influences affect a business

Answer 3

The government can change legislation on employment, health and safety, competition and taxation

Question 4

How can the economy impact a business

Answer 4

The economy can affect a business in ways of consumer demand.

Inflation, interest rates, value of the currency, unemployment will have an impact if the success of the business

For example car dealerships having to offer lengthened periods of payment to attract new customers when interest rates are high

Question 5

How can social aspects impact a business

Answer 5

Social changes are important for business demand

Changes in demographics, spending habits and social concerns.

For example and increase in retired people will have

Question 6

What are porters 5 forces when entering a new market

Answer 6

1. threat of new entrants- greater barriers of entry the less the threat of new entrants taking market share

2.bargaining power of suppliers-string suppliers can force prices up

3.bargaining power of consumers-Strong consumers can force price down

4.threat of substitutes-Need to keep up to date with better, similar products

5.degree of competition- High competition means price wars, innovation and higher spending on promotion

Question 7

What are Porters generic strategies on how a company can achieve a competitive advantage

Answer 7

1. Cost leadership-Aim to be lowest cost producer in the market-economies of scale

2.differentiation-Producing goods that are different (or perceived to be different)- USP

3.focus or niche-producing for a certain section of the market

4.stuck in the middle- if a business tries to do all three they may limit success

Question 8

What is management by objectives(MBO)

Answer 8

Where managers and employees agree on a series of adjectives for the business

It includes measuring employeee performance against the standards set.

Question 9

What is the advantages of management by objectives

Answer 9

Improve employee motivation
• Increases interaction of managers and employees- making communication better

Everyone working towards one goal- more efficient

Question 10

What are the disadvantages of management by objectives

Answer 10

The goals can become more important as a focus than having a cohesive, achievable plan

Meeting the targets at any cost may result in poor quality output- poor reputation