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Description
Flashcards by Ashleigh-Jade Jones, updated more than 1 year ago
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Created by Ashleigh-Jade Jones
about 7 years ago
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| Question | Answer |
| Mission Statement: | A qualitative statement of a company's core purpose and values and the starting point for any corporate or functional objectives |
| A Good Mission Statement: | - clear - concise - appealing to customers - provides direction for employees & the organisation - original - SMART |
| A Poor Mission Statement: | - unclear - uninteresting to customer - excessive use of jargon (complex language) - not SMART |
| Objectives Need to be SMART: | S - Specific (so employess know what they're working towards) M - Measurable (it can be measured to show if it will be achieved or not) A - Agreed (staff must agree on the aim) R - Realistic (the target is possible given the resources are available) T - Timed (will be met in a given time period) |
| Hierarchy of Objectives: *Increasingly strategic going up *Increasingly details going down | Mission statement (purpose) ------------------------ Objectives - corporate & functional (long term goals/targets derived from aims) ----------------------------------------------- Strategy - corporate & functional (medium long-term plans to achieve objectives) ------------------------------------------------- Tactics -team & individual (short-term/day-to-day actions to implement strategy ------------------------------------------------- |
| Revenue: (turnover/sales) | Money raised by a business from selling its products Price x Quantity = Total Revenue P X Q = TR |
| Costs: | Expenses incurred by the business in order to operate. Two types known as Fixed and Variable. |
| Fixed Costs: | Costs which remain consistent as output changes e.g. salaries, rent, electricity etc. |
| Variable Costs: | Costs that change as output changes e.g. raw materials |
| Total Costs: | Fixed costs + Variable costs = Total costs FC + VC = TC |
| Profit: | Total Revenue - Total Costs = Profit TR - TC = P |
| Importance of Profit: | -Most important thing in a business -Keeps business alive/defines success -Can't exist without profit -Reward -Indicator of efficiency |
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