3.1.2 Theories of corporate strategy Flashcards
What is corporate strategy?
The overall scope + direction of a business and the way in which it’s various business operations work together to achieve particular goals.
What are the uses of Ansoff’s matrix?
-Consider future options for expansion
-Identify potential new markets or marketing strategies
What are the limitations of Ansoff’s matrix?
-Shows part of the picture
-Oversimplifies the market
-Large MNCs may need thousands of sub options + strategies
What are the 4 parts of Porters strategic matrix?
-Cost leadership
-Cost focus
-Differentiation
-Differentiation focus
What is cost leadership?
Making products at the lowest cost.
What is differentiation?
When the product or service is unique + the USP adds value to the product.
What is focus?
The product or service will serve a very small specific niche.
What does Porter suggest will happen if a business fails to pick a strategy?
They will be in danger + be ‘stuck in the middle’
What are the uses of Porter’s Strategic matrix?
-Those in support of Porter’s Strategic matrix, say that it establishes a clear direction for the business to go in.
-Identifies when a business may be in trouble.
What are the limitations of Porter’s Strategic Matrix?
▪️Not as relevant in very dynamic markets.
▪️May not be useful in a crisis situation.
▪️Over simplifies the market structure.
▪️Can be possible for a store or business to offer a range of products to a range of customers + not stuck in the middle.
What are the 4 parts of a Boston matrix?
-Star
-Question mark
-Cow
-Dog
What are strategic decisions?
-Long term direction of the business.
-What the business will do to meet it’s aims + objectives.
-Pro-active decision making.
-Forward thinking, future planning.
What are tactical decisions?
-Short/medium term decisions.
-How the business will implement it’s strategy.
-Reactive to competitor actions.
-Present day thinking, what is happening now that needs dealing with.
