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A level Business > 3.8 Choosing Strategic Direction > Flashcards

3.8 Choosing Strategic Direction Flashcards

1
Q

Strategy

A

Long term plan of action to meet business goals

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2
Q

Strategic direction and what influences it?

A

-Route business takes in order to meet corporate objectives

  • Informed by an assessment of the business’ SWOT analysis
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3
Q

What does strategic direction influence?

A

The markets a business will choose to compete in and what products to offer

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4
Q

What does Ansoff’s Matrix do?

A

Helps a business determine it’s product and market strategy measure the degree risk and potential for reward.

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5
Q

How does Ansoff’s matrix look?

A

Market penetration Product Dev
Market Dev Diversifiation

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6
Q

Market penetration and it’s characteristics

A

Selling more of existing products to existing markets

low risk, limited reward

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7
Q

approaches to market penetration (3) and possible dangers (3)

A

Approaches
- Extension strategies
- Encouraging more buying from customers
- gain share from competitors

Dangers
- relatively short term
-risk of cannibalism
-could be highly saturated market

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8
Q

market development and its characteristics

A

existing product, new market

risky due to lack of knowledge of new customers

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9
Q

approaches to market development (3) and possible dangers (3)

A

approaches
-enter international markets
- change promotional tactics
- new distrubution methods e.g e-commerce

dangers
- product may not be desired or accepted
-business may not understand market well
- Alienation of current customers

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10
Q

Product development and its characterstics

A

new products, existing markets

risk due to High R&D costs, not knowing the product and how competitors will react

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11
Q

approaches to product development (3) and possible dangers (3)

A

approaches
- improve on existing products
- make complementary products
- innovate new products

dangers
- risk of cannibalisation
- may shorten life cycle of existing products
- damage to brand and it’s image

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12
Q

Diversification and its characteristics

A

new products, new markets

riskiest because everything is unknown, highest potential for reward

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13
Q

approaches to diversification (2) and possible dangers (3)

A

approaches
- acquisition of new business
- r&d into new products and markets

dangers
-brand name may be diluted
- cultural differences may exist
-high investments

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14
Q

Strategic Positioning and what it is based on?

A

Where the business wants to be in the market, relative to its competitors

based on consumer perception

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15
Q

What does Porter’s Strategic Matrix do?

A

Marketing strategies a business can adopt in an attempt to achieve competitive advantage

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16
Q

what are the four factors of porters strategic matrix?

A
  1. Cost leadership
  2. focused cost leadership
  3. differentiation
  4. focused differentiation
17
Q

Low cost advantage

A
  • if the market all has similar selling prices, the lowest cost operator will enjoy higher profits and higher market share
  • Large scale/batch buying = economies of scale
18
Q

what markets are suitable for low cost strategy? (2)

A
  • where branding is relatively unimportant
  • little product differentiation
19
Q

what is differentiation according to Porter?

A

Having a good or service that stands out from the competition

20
Q

Ways to achieve differentiation (4)

A
  1. Sustained promotion
  2. Superior Product quality (features, benefits etc)
  3. Branding ( strong customer recognition)
  4. Wide distribution
21
Q

what does Bowmans strategic clock shows?

A

8 competitive positions based on price and perceived added value

22
Q

what are the 8 competitive positions on Bowmans strategic clock

A
  1. low price, low added value
  2. low price
  3. Hybrid
  4. Differentiation
  5. Focused Differentiation
  6. Risky high margins
  7. Monopoly pricing
  8. Loss of market share pricing
23
Q

what is low price, low added value

A

literally in the name…
think POUNDLAND

24
Q

what is low price on Bowmans strategic clock

A

low price with moderate perceived value

ie Travelodge

25
Q

what is Hybrid on Bowmans clock

A

Low price, high value

ie Aldi

26
Q

what is Differentiation on Bowmans clock

A

offers a product with a USP for a moderate to high price

27
Q

what is focused differenation on Bowmans clock

A

high price, high perceived value

ie Armani

28
Q

what is Risky high margins on Bowmans clock

A

high price, moderate perceived value

29
Q

what is Monopoly pricing on bowman’s clock

A

High price due to the business being a monopoly but low perceived value

30
Q

what is Loss of market share on Bowmans clock

A

standard price, low value

A level Business (1 decks)

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