Unit 3: Business Decisions and Strategy
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3.3.1 - Business objectives and strategy
3.3.1.1aCorporate objectives
Explain development of corporate objectives from mission statements and corporate aims.
3.3.1.1bMission statement appraisal
Critically appraise mission statements.
3.3.1.2aCorporate strategy models
Use Ansoff Matrix and Porter Strategic Matrix in corporate strategy.
3.3.1.2bPortfolio analysis
Explain the aim of portfolio analysis.
3.3.1.2cStrategic and tactical resource effects
Analyse effects of strategic and tactical decisions on human, physical and financial resources.
3.3.1.3aSWOT analysis
Use SWOT analysis with internal strengths and weaknesses and external opportunities and threats.
3.3.1.4aPESTLE
Apply PESTLE analysis to external influences.
3.3.1.4bChanging competitive environment
Analyse the changing competitive environment.
3.3.1.4cPorter five forces
Apply Porter five forces.
3.3.2 - Business growth
3.3.2.1aGrowth objectives
Analyse growth objectives including economies of scale, market power, market share, brand recognition and profitability.
3.3.2.1bOrganic and inorganic growth
Distinguish inorganic growth from organic growth.
3.3.2.2aOrganic growth methods
Explain methods of growing organically.
3.3.2.2bOrganic growth evaluation
Evaluate advantages and disadvantages of organic growth.
3.3.2.3aMergers and takeovers
Analyse reasons for mergers and takeovers, differences between them, integration types, conglomerates and financial risks or rewards.
3.3.2.3bInorganic growth evaluation
Evaluate advantages and disadvantages of inorganic growth.
3.3.2.4aDiseconomies of scale
Explain diseconomies of scale as a growth problem.
3.3.2.4bInternal communication problems
Analyse internal communication problems from growth.
3.3.2.4cOvertrading
Explain overtrading as a growth problem.
3.3.3 - Decision-making techniques
3.3.3.1aMoving averages
Calculate time-series analysis using three-period or four-quarter moving averages.
3.3.3.1bScatter graphs and line of best fit
Interpret scatter graphs and line of best fit, including extrapolation of past data.
3.3.3.1cSales forecasting limitations
Evaluate limitations of quantitative sales forecasting techniques.
3.3.3.2aSimple payback
Calculate and interpret simple payback.
3.3.3.2bAverage rate of return
Calculate and interpret average accounting rate of return.
3.3.3.2cNet present value
Calculate and interpret discounted cash flow using net present value only.
3.3.3.2dInvestment appraisal interpretation
Interpret figures generated by investment appraisal techniques.
3.3.3.2eInvestment appraisal limitations
Evaluate limitations of investment appraisal techniques.
3.3.3.3aDecision tree construction
Construct and interpret simple decision-tree diagrams.
3.3.3.3bDecision tree calculations
Calculate and interpret figures generated by decision trees.
3.3.3.3cDecision tree limitations
Evaluate limitations of using decision trees.
3.3.3.4aCritical path purpose
Explain the nature and purpose of critical path analysis.
3.3.3.4bCritical path networks
Complete and interpret simple networks to identify the critical path.
3.3.3.4cCritical path calculations
Calculate earliest start time, latest finish time and total float.
3.3.3.4dCritical path limitations
Evaluate limitations of critical path analysis.
3.3.3.5aContribution purpose
Explain the nature and purpose of contribution.
3.3.3.5bContribution calculation
Calculate and interpret contribution.
3.3.3.5cContribution in decisions
Use contribution as a decision-making technique.
3.3.4 - Influences on business decisions
3.3.4.1aStrong and weak cultures
Compare strong and weak corporate cultures.
3.3.4.1bCulture classification
Classify company cultures as power, role, task or person cultures.
3.3.4.1cCulture formation
Explain how corporate culture is formed.
3.3.4.1dChanging culture
Evaluate difficulties in changing an established culture.
3.3.4.2aInternal and external stakeholders
Distinguish internal from external stakeholders.
3.3.4.2bStakeholder objectives
Analyse stakeholder objectives.
3.3.4.2cStakeholder and shareholder influences
Compare stakeholder-focused decisions with shareholder-return-focused decisions.
3.3.4.2dStakeholder conflict
Analyse conflict between profit-based shareholder objectives and wider stakeholder objectives.
3.3.4.3aEthics and strategy
Evaluate trade-offs between profit and ethics in strategic decisions.
3.3.4.3bPay and rewards ethics
Analyse ethical issues in pay and rewards.
3.3.4.3cCorporate social responsibility
Evaluate corporate social responsibility.
3.3.5 - Assessing competitiveness
3.3.5.1aStatement of comprehensive income
Interpret key information and stakeholder interest in statements of comprehensive income.
3.3.5.1bStatement of financial position
Interpret key information and stakeholder interest in statements of financial position.
3.3.5.2aFinancial ratio calculation
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.
3.3.5.2bRatio interpretation
Interpret ratios to make business decisions.
3.3.5.2cRatio limitations
Evaluate limitations of ratio analysis.
3.3.5.3aHR calculations
Calculate and interpret labour productivity, labour turnover, retention and absenteeism.
3.3.5.3bHR calculation limitations
Evaluate limitations of human resource calculations.
3.3.5.3cHR strategies
Evaluate financial rewards, employee share ownership, consultation and empowerment as strategies to improve productivity and retention and reduce turnover and absenteeism.
3.3.6 - Managing change
3.3.6.1aOrganisational culture and change
Analyse organisational culture as a key factor in change.
3.3.6.1bOrganisation size and change
Analyse organisation size as a key factor in change.
3.3.6.1cSpeed of change
Analyse time and speed of change.
3.3.6.1dResistance to change
Evaluate managing resistance to change.
3.3.6.1eTransformative leadership
Explain transformative leadership in managing change.
3.3.6.2aRisk assessment
Identify key risks through risk assessment, including natural disasters, IT systems failure and loss of key staff.
3.3.6.2bRisk mitigation planning
Plan risk mitigation through business continuity and succession planning.