3.1.2 Theories Of corporate Strategy

Question 1

Strategies

Answer 1

Long term plan for achieving objectives

Question 2

Tactics

Answer 2

Short term plan to achieve a strategy, eg for the strategic decision to expand production capacity the tactic might be to recruit more staff

They can diverge from the strategy such as lowering prices in response to competitors

Question 3

Resources affected by strategies & tactics

Answer 3

Human: if to achieve their strategy theyll need more staff, or if the tech will make workers redundant

physical: investment in new resources eg machines to increase output

Financial: consider how to fund decisions eg a long term growth strategy might need to be financed through a change in ownership from a Ltd to Plc

Question 4

Resources affected by strategies & tactics

Answer 4

Human physical Financial

Question 5

Ansoff’s four options for Strategic Growth

Answer 5

Market Penetration: 📈 market share, good for growing markets (saturated👎)

New prod development:new products in your existing market, 👍growing market & ⬆️ market share

Market development: new markets, could be e commerce

Diversification: new products new markets, risky, become less dependant on limited product range

Question 6

Porter’s Strategic Matrix

Answer 6

Small to Medium sized, as large firms operate in multiple of the quadrants

Question 7

Ansoff’s Matrix

Answer 7

Question 8

Porter’s 3 generic advantage strategies

Answer 8

Cost leadership: lowest possible cost of prod at a given quality

Differentiation: USP

Focus: Niche markets focus, differentiating or minimising costs, for firms with fewer resources

Question 9

Porter’s Strategic Matrix

Question 10

Kay’s 3 Capabilities

Answer 10

Architecture; stakeholder relationships

Reputation: Satisfaction of customers, such as customer service or high quality

Innovation: USP

Question 11

Capabilities need to be …

Answer 11

maintain their advantage over time (Sustainable)

Unable to be copied eg copyright (Appropriable)

Question 12

Boston Matrix limitations & strengths

Answer 12

Can help businesses come up with strategies about product investment, doesn’t account for products with medium market share or growth, the high and low oversimplifies things, high market share also doesn’t mean high profitability

Question 15

Boston Matrix

Answer 15