Buss3 Exam Guide

Topics: Marketing, Marketing plan, Strategic management Pages: 28 (6948 words) Published: April 16, 2013
Unit 3
Functional Objectives and Strategies
Quantifiable targets or goals to be achieved within a given time frame SMART- Specific, Measurable, Achievable, Realistic, Timed
* Provides focus and direction
* Sets a benchmark in which to measure performance
Corporate Objectives
The long term goals of a business
* Informs decisions making
* Provides strategic direction
* Guides organisation
Functional Objectives
Medium to long term goals of the business functions within a business, helping it achieve its corporate objectives * Focussed on corporate objectives, they’re set in order to help achieve these * Provides strategic direction within each function

* Impacts upon other functional objectives
* Must be coordinated
* Set for each division/department to help guide the divisions/departments actions

Businesses will set a range of functional objectives e.g. minimising costs and increasing market share Functional Strategies
A detailed plan of how a functional area in a business will go about achieving the functional objectives

Understanding Financial Objectives
Financial Objectives
The monetary targets a business wants to achieve in a given period of time. Cash flow targets
These are set to:
* Are required to meet the short term objective of survival * To meet day to day expenses
* To achieve specific cash flow targets (to ensure all debts are received within 30 days) A cash flow target may be to have a surplus of cash in order to take advantage of unforeseen opportunities or unforeseen expenses. Cost minimisation targets

A firm that can minimise costs can increase profit margins. Actions can be taken to minimise fixed/variable costs. These can be achieved by tactical/strategic changes (i.e. identifying a cheaper source of raw materials) It will only be effective, however, if company revenue and reputation are not diminished. Return on Capital employed

A measure of the firm’s profitability and performance
* Return - how much money the business is getting back
* Capital employed - how much money is being used within the business * ROCE are set as a percentage, they are a benchmark to industry standards and internal Benchmarking
Shareholders returns
Measuring Shareholders’ returns:
* Dividends paid
* Dividends as a % of market value
Internal influences| External influences|
Factors from within the business| Factors from outside the business| Corporate and other functional objectives| Competitors|
Characteristics of the firm| Consumers|
Relationship between owners and directors| Economic conditions| Public or private sector| External environment|
Internal influences
Financial objectives
will have to contribute towards achieving corporate objectives will be influenced by other functional objectives

The Characteristics of the firm
Capital VS labour intensive
Low cost or highly differentiated
Relationship between owners and directors
within a PLC these can be the same or different
What is the power of individual shareholders?
Public or Private sector
A key influence of the overall objective of a business
External influences
Leader or follower
Degree or relative power of competition
Actions and reaction
Degree of Loyalty
changing tastes
Economic Conditions
Stable or unstable
economic growth or decline
Optimistic or Pessimistic
External Environment
political, social or technological change

Understanding Operational Objectives
Operational Objectives
The target a firm sets I order to produce goods/service in the most effective way. Operational Objectives looks at the aims of a business in producing goods and providing services. It will include the following areas: * Meeting Quality

* Cost and volume targets
* Innovation
* Efficiency (including time)
* Environmental targets
Operational Objectives – Quality, cost, and...
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