Mission, objective and SWOT analysis (A Level) flashcards

Topic 6: Mission, objective and SWOT analysis

Mission statement vs objective

Mission statement: a qualitative statement of a business’s purpose and values, with no numbers and no deadline. Objective: a measurable target (best when SMART) that moves the business towards its mission.

What decides how valuable a mission statement is?

How specific it is, whether leaders act on it and whether it matches how the business really behaves. A vague or public-relations mission adds little and can breed cynicism.

Shareholder value vs shareholder returns

Shareholder value: what the business is worth to its owners; for a plc, measured by market capitalisation. Shareholder returns: what owners receive, measured by dividend per share and dividend yield (plus any share price rise).

A plc pays total dividends of £2.16m on 12 million shares priced at £4.00. Find the dividend per share and dividend yield.

Dividend per share = 2,160,000 ÷ 12,000,000 = £0.18. Dividend yield = 0.18 ÷ 4.00 × 100 = 4.5%.

Growth, social and environmental objectives

Growth: a target for size (revenue, market share, outlets, new markets). Social: a target for the effect on people (fair pay, community projects). Environmental: a target for the effect on the planet (emissions, waste).

SWOT: which parts are internal and which external?

Strengths and weaknesses are internal and largely controllable; opportunities and threats are external and outside the firm’s control. A new low-cost rival is a threat.

Turning functional data into a strength or weakness

Calculate the measure, compare it with a benchmark (last year, a rival, the industry or a target), label it and say why, link it to a decision or objective, then weigh it: one figure rarely decides the case.

Stakeholder mapping: the four responses on the power-interest grid

High power, high interest: manage closely. High power, low interest: keep satisfied. Low power, high interest: keep informed. Low power, low interest: monitor.

Stakeholder overlap vs conflict

Overlap: success serves many groups at once (profits fund wages, dividends and supplier orders). Conflict: one group gains at another’s expense (cost cuts against jobs; expansion against the local environment).

Influences on a business’s objectives

Mission and culture, ownership and legal structure, size and age, stakeholder power, the internal position, the external environment and past performance.