2. Theories of corporate strategy

Question 1

Corporate Strategy

Answer 1

The overall direction of a business and the way in which its
various business operations work together to achieve particular goals

Question 2

Ansoff’s Matrix

Answer 2

…………………………- Existing product - New product
———————————————->
Existing market | Market | New product or service
| Penetration. | Development
| (Low risk) | (Medium risk)
| ———————- |————————-
New market | Market | Diversification
| Development | (high risk)
| (Medium risk) |
| ——————— |

Question 3

Ansoff’s Matrix
- Use

Answer 3

Ansoff’s matrix helps to identify potential new markets or marketing strategies for a business

Question 4

Porter’s Strategic matrix

Answer 4

…………………………- Competetive advantage
———————————————->
Broad target. | Cost. |
| Leadership | Differentiation
| |
| ———————- |————————-
Narrow target | |
| Cost | Differentiation
| focus | focus
| ——————— |————————–

(y -axis = Competetive scope)

Question 5

Porter’s Strategic matrix
- Use

Answer 5

It represents the ways for a business to gain competetive advantage in a merket

Question 6

Porter’s Strategic matrix
- Limitations

Answer 6

• Not as relevant in very dynamic markets
• May not be useful in a crisis situation
• Over simplifies the market structure

Question 7

Corporate strategy

Answer 7

The overall scope and direction of a business and the way in which its various business operations work together to achieve particular goals

Question 8

Aim of portfolio analysis

Answer 8

• Research and compare performances of product/market combinations.
• Reveal mutual relations of product/market combinations and vitality.
• Compel towards making choices. Generate support for changes.