Corporate Aims and Objectives:
[WATCH VIDEO ON PRIMARK]
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Mission statements.
Corporate aims and objectives.
Corporate strategies – purpose and nature, relationship with aims and
objectives.
Differing stakeholder perspectives – potential for conflict, influence on
decision making.
Corporate plans include:
1. Overall objectives
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Profit target
Sales growth
Market share target
2. The strategy or strategies to meet these objectives
TASK
Individually identify actual examples of strategies your chosen
business could use to achieve each of the objectives stated above:
Example: An overall objective for a firm may be sales growth. A strategy to
achieve this for a firm could be to increase sales of existing products (Ansoff;
market penetration). An actual example in the recession is Wetherspoons.
Wetherspoon’s Pubs
The Primark of pubs, JD Wetherspoon has risen to the twin challenges of falling
beer consumption and economic slowdown by blitzing customers with deals from
a full English breakfast for £2.69 to 99p for pints of beer. As a result like for like
sales climbed 2.6% in the latest quarter, while more upmarket rivals have been
unable to halt falling revenues”.
(Source: UK Recession winners by Amy Wilson.
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/4977600/U
K-recession-winners-Top-five.html
3. The main objectives for the key departments of the business derived
from the overall objectives.
TASK
Identify the main internal and external influences on a corporate plan
Internal
External
The value of corporate plans
Corporate planning is not just for the benefit of senior management, it is
paramount that the information is shared with everyone within the organisation.
Key stakeholders it should be shared with are:
Potential investors (share issue)
Major lenders (Banks/Financial institutions)
Government
All staff (SMART targets for departments)
TASK
Explain why it is important that the plans are shared with each of the
above stakeholders.
Mission and Objectives
Businesses strengths must fit in with both the mission statement and corporate
objectives of the organisation. However, it could be argued that in a crisis
situation of a recession it might be necessary to jettison existing mission and
objectives, it should only be done after careful consideration.
For instance, the obvious strategy of going downmarket as a discount retailer
might at first be appealing, but such a change might undermine the
organisation’s mission of seeking to be the “first choice source of quality
products.”
Contradictory signals about price and quality will confuse consumers and might
lead to further lost sales from otherwise loyal customers.
Contingency Planning
Business success is always based on a sound plan which identifies where the
company is going and how it intends to get there. But, alongside the normal
business plan some consideration should be given to the “what if questions” eg
what will happen if the economy is plunged into recession? And contingency
plans should be drawn up based on worst case scenarios.
Final Tips for Business Survival
“It is a sad fact of business life that some businesses will fail… But with the
acumen, finance and the drive to succeed, following some basic rules may
dramatically improve a company’s chances of success.”
(David Robertson, CEO of Bibby Financial Services). His top ten tips are:
David Robertson, CEO of Bibby Financial Services’ Top Ten Tips for Survival
1. Plan – research the market, construct and be prepared to revise your
business plan as circumstances change.
2. Pace yourself – investing too much too soon may lead to a business
becoming over-stretched.
3. Credit – negotiate longer credit terms with your suppliers, but set shorter
terms for your customers.
4. Layout your terms – establish and agree credit terms upfront. Ensure
invoices are issued promptly, clearly displaying the conditions of the
transaction.
5. Recognise that “cash is king” – it is no good generating high sales
volume if it is not quickly followed by inflow of cash.
6. Streamline – look to ways in which internal processes can be carried out
more efficiently. Cut out waste.
7. Delegate – to free up the time of top management to focus on core
activities and strategic decisions.
8. Ask the experts – seek external advice where necessary.
9. Be honest and realistic. If things are not working out how you thought
they would, address the reasons why this is happening and find a new
approach.
10. Roll with the punches – be decisive in tackling any problems head on
and deal with them promptly.
Source: adapted from Top Ten Tips for Business Survival –
www.smallbusinesses.co.uk
SWOT Analysis for BSAK – use sheet on Weebly.