3.1.2 Theories of corporate strategy

Question 1

What is Ansoff’s matrix?

Answer 1

Shows how a company seeking growth should choose their strategy by analysing risk

Question 2

What is market penetration?

Answer 2

Increase the growth of an existing product in an existing market.

Question 3

What is product development?

Answer 3

New products in existing markets.

Question 4

What is market development?

Answer 4

Existing products in a new market.

Question 5

What is diversification?

Answer 5

Developing new products in new markets. (most risky)

Question 6

What is porters strategic mix?

Answer 6

Cost leadership- making products at the lowest cost.
Differentiation- USP of the product adds value
Focus- product will suit a specific niche with no substitutes

Question 7

What does the Boston matrix show?

Answer 7

Reviews a business’s existing product line.

Question 8

What are Kay’s distinctive capabilities?

Answer 8

They add value and give a competitive edge

Architecture- relationships with employees, suppliers and customers.
Reputation- Through customer experience.
Innovation- Bringing inventions to markets.

Question 9

What are features of strategic decisions?

Answer 9

• Forward thinking
• Long term

Question 10

What are features of tactical decisions?

Answer 10

• Short term
• Reactive to actions of competitors