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Unit 3: Business Decisions and Strategy

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6 topics · 62 learning objectives

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  1. 3.3.1 - Business objectives and strategy

    1. Explain development of corporate objectives from mission statements and corporate aims.

    2. Critically appraise mission statements.

    3. Use Ansoff Matrix and Porter Strategic Matrix in corporate strategy.

    4. Explain the aim of portfolio analysis.

    5. Analyse effects of strategic and tactical decisions on human, physical and financial resources.

    6. Use SWOT analysis with internal strengths and weaknesses and external opportunities and threats.

    7. Apply PESTLE analysis to external influences.

    8. Analyse the changing competitive environment.

    9. Apply Porter five forces.

  2. 3.3.2 - Business growth

    1. Analyse growth objectives including economies of scale, market power, market share, brand recognition and profitability.

    2. Distinguish inorganic growth from organic growth.

    3. Explain methods of growing organically.

    4. Evaluate advantages and disadvantages of organic growth.

    5. Analyse reasons for mergers and takeovers, differences between them, integration types, conglomerates and financial risks or rewards.

    6. Evaluate advantages and disadvantages of inorganic growth.

    7. Explain diseconomies of scale as a growth problem.

    8. Analyse internal communication problems from growth.

    9. Explain overtrading as a growth problem.

  3. 3.3.3 - Decision-making techniques

    1. 3.3.3.1aMoving averages

      Calculate time-series analysis using three-period or four-quarter moving averages.

    2. 3.3.3.1bScatter graphs and line of best fit

      Interpret scatter graphs and line of best fit, including extrapolation of past data.

    3. 3.3.3.1cSales forecasting limitations

      Evaluate limitations of quantitative sales forecasting techniques.

    4. 3.3.3.2aSimple payback

      Calculate and interpret simple payback.

    5. 3.3.3.2bAverage rate of return

      Calculate and interpret average accounting rate of return.

    6. 3.3.3.2cNet present value

      Calculate and interpret discounted cash flow using net present value only.

    7. 3.3.3.2dInvestment appraisal interpretation

      Interpret figures generated by investment appraisal techniques.

    8. 3.3.3.2eInvestment appraisal limitations

      Evaluate limitations of investment appraisal techniques.

    9. 3.3.3.3aDecision tree construction

      Construct and interpret simple decision-tree diagrams.

    10. 3.3.3.3bDecision tree calculations

      Calculate and interpret figures generated by decision trees.

    11. 3.3.3.3cDecision tree limitations

      Evaluate limitations of using decision trees.

    12. 3.3.3.4aCritical path purpose

      Explain the nature and purpose of critical path analysis.

    13. 3.3.3.4bCritical path networks

      Complete and interpret simple networks to identify the critical path.

    14. 3.3.3.4cCritical path calculations

      Calculate earliest start time, latest finish time and total float.

    15. 3.3.3.4dCritical path limitations

      Evaluate limitations of critical path analysis.

    16. 3.3.3.5aContribution purpose

      Explain the nature and purpose of contribution.

    17. 3.3.3.5bContribution calculation

      Calculate and interpret contribution.

    18. 3.3.3.5cContribution in decisions

      Use contribution as a decision-making technique.

  4. 3.3.4 - Influences on business decisions

    1. Compare strong and weak corporate cultures.

    2. Classify company cultures as power, role, task or person cultures.

    3. Explain how corporate culture is formed.

    4. Evaluate difficulties in changing an established culture.

    5. Distinguish internal from external stakeholders.

    6. Analyse stakeholder objectives.

    7. Compare stakeholder-focused decisions with shareholder-return-focused decisions.

    8. Analyse conflict between profit-based shareholder objectives and wider stakeholder objectives.

    9. Evaluate trade-offs between profit and ethics in strategic decisions.

    10. Analyse ethical issues in pay and rewards.

    11. Evaluate corporate social responsibility.

  5. 3.3.5 - Assessing competitiveness

    1. Interpret key information and stakeholder interest in statements of comprehensive income.

    2. Interpret key information and stakeholder interest in statements of financial position.

    3. Calculate and interpret gross profit margin, operating profit margin, profit-for-the-year margin, current ratio, acid-test ratio, gearing and return on capital employed using the prescribed financial statements and formulae.

    4. Interpret ratios to make business decisions.

    5. Evaluate limitations of ratio analysis.

    6. Calculate and interpret labour productivity, labour turnover, retention and absenteeism.

    7. Evaluate limitations of human resource calculations.

    8. Evaluate financial rewards, employee share ownership, consultation and empowerment as strategies to improve productivity and retention and reduce turnover and absenteeism.

  6. 3.3.6 - Managing change

    1. Analyse organisational culture as a key factor in change.

    2. Analyse organisation size as a key factor in change.

    3. Analyse time and speed of change.

    4. Evaluate managing resistance to change.

    5. Explain transformative leadership in managing change.

    6. Identify key risks through risk assessment, including natural disasters, IT systems failure and loss of key staff.

    7. Plan risk mitigation through business continuity and succession planning.