Business Decisions and Strategy
THE BIG IDEA
“This is about the big plans businesses make to stay successful. It covers how bosses use maths and charts to decide which new products to launch, where to spend their money, and how to beat their rivals without taking too many risks.“
CRUCIAL KEYWORDS
Corporate Strategy
The master plan that decides what the whole company wants to achieve over many years.
Synergy
When two businesses work together and become much better than they were on their own (1+1=3).
Strategic Drift
When a company falls behind because the world changed but their plan stayed the same.
Investment Appraisal
Using math to see if spending money on a big project will actually make a profit in the end.
How It Works
1) Ansoff’s Matrix
Imagine a map with four paths: doing more of the same, making new things for your fans, selling your old stuff to new people, or starting something totally new.
2) Porter’s Generic Strategies
You can win by being the cheapest (Value), being the most unique (Premium), or being the best at one tiny specific thing (Niche).
3) Decision Trees
A drawing that looks like branches showing different choices, their chances of happening, and how much money they might make.
CASE STUDY EVIDENCE
- Amazon bought a grocery shop so they could sell food in person, not just on the internet.
- Nokia used to be the biggest phone maker but they didn’t change fast enough when iPhones came out, so they lost their lead.
EXAM ESSENTIALS
- Even if the maths says a project makes money, check if it will make your workers unhappy or hurt the planet.
- GIGO: Garbage In, Garbage Out. If your guesses about the future are wrong, your decision tree will be useless.