3.8 - Choosing Stategic Direction Flashcards
1
Q
Ansoffs matrix
A
- market development
- market penetration
- diversification
- product development
2
Q
Ansoff matrix - market penetration
A
- involves increasing sales of existing products to existing markets
- eg McDonald’s promoting happy meal in olives targeting an existing product in an existing market
3
Q
Ansoffs matrix - market development
A
- involves targeting existing products at new markets to increase sales
4
Q
Ansoffs matrix - product development
A
- targeting new products in existing markets o
- eg kfc introducing pizza
5
Q
Diversification
A
- targeting new products at new markets
- advantages - large rewards , spread risk as gives business’s an alternative if demand for one product declines
- disadvatages - will have limited experience increasing risk
6
Q
Influences on straegic direction
A
- level of risk
- opportunity costs
- culture of business
7
Q
Price competition
A
- business may decide to compete against other businesses on the basis of prior
- eg donate retailers of try price match or under cut one another to remain competitive
8
Q
Customer benefits
A
- business may decide to compete against other businesses on the basis of the benefit it can offer a customer
9
Q
Porters strategies
A
- cost leadership
- cost focus
- differentiation leadership
- differentiation focus
10
Q
Porter - cost leadership
A
- taken when businesses compete on price and seek to be the cheapest retailer/priducer on the market
- eg Aldi
- businesses can increase their competitor advantage by reducing costs
11
Q
Porter - differentiation approach
A
- taken by business that compete in terms of the benefits offered to customers from the purchase of its products/services
- can increase competitiveness by investing in R&D and innovation
- eg Apple
12
Q
Porter - stuck in the middle?
A
- if businesses fail to target customers based on cost or differentiation, porters strategy classifies the business as a concern, known as ‘stuck in the middle’
13
Q
A
