CCEA A-Level Business Studies A2 1 Strategic Decision Making overview quiz quiz

A long-term, organisation-wide decision taken by senior management

A daily operational choice made by a shop-floor supervisor

A short-term decision easily reversed by middle management

A routine decision about the weekly staff rota

Opportunities and threats

Strengths and weaknesses

Political and economic factors

Social and technological factors

Market penetration, selling more to existing markets

Market development, selling existing products to new markets

Product development, new products for existing markets

Diversification, new products in new markets

3 years

4 years

5 years

2 years

Because it is the quickest and simplest method to calculate

Because it ignores cash flows that occur after the payback point

Because it accounts for the time value of money over the whole project

Because it never depends on any estimated future figures

(Gross profit / revenue) times 100

(Net profit / revenue) times 100

(Operating profit / capital employed) times 100

(Revenue / gross profit) times 100

It has more than enough current assets to cover its short-term debts

Its current liabilities exceed its current assets, suggesting a liquidity concern

It is holding far too much idle cash and stock

It has no short-term liabilities to worry about at all

It relies mainly on shareholders' equity rather than borrowing

It holds a very large amount of cash relative to its debts

It relies heavily on borrowed money and faces higher interest risk

It has no long-term liabilities of any kind

30,000 pounds

25,000 pounds

20,000 pounds

15,000 pounds

The spare time a non-critical activity has before it delays the project

The total time the whole project must take to finish

The earliest time at which the first activity can start

The cost of completing each activity in the network

It is the shortest route through the network by time

It is the path with the most float available

It is the longest path by time, setting the minimum project duration

It contains only non-critical activities

To replace the need for any market research

To guarantee that the business will make a profit

To help secure finance and guide decisions

To avoid having to set any objectives

Preparing in advance for unexpected, damaging events

Setting the annual sales and expenditure budgets

Calculating the break-even output for a product

Choosing the marketing mix for a new product

It provides an objective, comparable measure of performance

It is based on past data and ignores qualitative factors

It can be compared over several years to reveal trends

It uses figures taken from the financial statements

Preparing plans long before any crisis occurs

Setting the firm's long-term strategic objectives

Responding during and after a crisis as it unfolds

Calculating the expected value of risky options