3.1.2 theories of corporate strategy

Question 1

Ansoff’s matrix

Answer 1

A strategic tool to help a business achieve growth

Question 2

corporate strategy

Answer 2

the long term plan to achieve the aims of the entire business

Question 3

market penetration (ansoff)

Answer 3

the purpose is to achieve growth in existing markets with existing products

Question 4

product development (ansoff)

Answer 4

concerned with marketing new or modified products in existing markets.

Question 5

Market development (ansoff)

Answer 5

involved the marketing of existing products in new markets

Question 6

diversification(ansoff)

Answer 6

diversification occurs when new products are developed for new markets

Question 7

Poter’s strategic mix

Answer 7

created for gaining competitive advantage

Question 8

cost leadership(porter)

Answer 8

involves striving to be the lowest-cost provider in the market

Question 9

Differentation(porter)

Answer 9

involves a business operating in a mass market but adopting a unique position instead of the lowest-cost position

Question 10

Focus(porter)

Answer 10

involves targeting a narrow range of customers in two ways:

• cost focus- emphasising cost-minimisation
• Differentiation focus-pursuing different strategies within a focused market

Question 11

Boston matrix

Answer 11

a tool to categorise businesses

Question 12

Stars(Boston matrix)

Answer 12

high-growth products that are strong compared to those of competitors. Stars require investment, but the hope is that they will become a cash cow

Question 13

Cash Cows(Boston matrix)

Answer 13

low-growth products with high market shares. Generate more cash than they consume and so can provide a return for the investors and can fund investment in other areas

Question 14

Question marks(Boston matrix)

Answer 14

products with low market share in high growth markets. They consume a lot of cash but give little returns but have the potential to turn into stars

Question 15

Dogs(Boston matrix)

Answer 15

products with low market share in low-growth markets. They may break even, but nevertheless, take u time and effort with little prospect of future growth.They should be sold or divested.