3.8 - Choosing a Strategic Direction Flashcards
What is Ansoff’s matrix?
a model used to show the degree of risk associated with the four growth strategies of market penetration, market development, product development and diversification
What is market penetration?
a marketing strategy that tries to increase market share among existing customers
What is market development?
company growth by identifying and developing new market segments for current company products
What is product development?
company growth by offering modified or new products to current market segments
What is diversification?
a strategy of increasing sales by introducing new products into new markets
What is strategic positioning?
attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
What are Porter’s Generic Strategy?
cost leadership, differentiation, cost focus, differentiation focus
What is the low cost strategy?
A strategy an organisation uses to build competitive advantage by being efficient and offering a standard, no-frills product.
What is the differentiation strategy?
Distinguishing an organisation’s products from the products of competitors on dimensions such as product design, quality, or after-sales service.
What is the focus low-cost strategy?
Serving only one segment of the overall market and trying to be the lowest-cost organisation serving that segment.
What is the focused differentiation strategy?
same as the differentiation strategy except with a narrow focus on a niche market
What are the influences on the choice of a positioning strategy?
competitors
core competencies
external environment
What are the benefits of having a competitive advantage?
- Increased profits
- Increased sales and market share
- Higher capacity utilisation
- Economies of scale
What are the difficulties of maintaining a competitive advantage?
- Maintaining product differentiation
- New entrants to the market
- Change in fashion and consumer taste
