3.8.1 Strategic direction: choosing which markets to compete in and what products to offer Flashcards
What is a strategic direction?
The general path a business takes, based on its mission and achieving its objectives
What factors influence markets?
- Type of product
- Level of competition
- External factors
- Internal resources
- Attitude to risk
What factors influence products?
- Research and development (RAD)
- Competitors
- Technology
- Finances
- External factors
What is a strategy?
A long-term plan of how a business sets out to achieve its aims and objectives
What is the ansoff matrix?
A marketing planning model that helps a business determine its products and market strategy
What are the factors of the ansoff matrix?
- Market penetration
- Product development
- Marketi development
- Diversification
What is an advantage of ansoff’s matrix?
It doesnt just lay out potential strategies for growth- also forces managers to think about expected risks
What is a disadvantage of ansoff matrix?
It fails to show that market development and diversification strategies tend to require significant changes to day-to-day workings
What is market penetration?
Where the business focuses on selling existing products into existing markets
What are some factors of market penetration?
main objectives to:
* Maintain or increase the market share of current products
* Secure dominance of growth markets
* Increase usage of existing customers
* Restructure a mature market by driving out competitors
What is market development?
Where the business seeks to sell its existing product into new markets
What are some factors of market development?
Ways to approach this strategy:
* New geographical markets
* New product dimension or packaging
* New distribution channels
* Different pricing policies to attract different customers or crceate new markets segments
What is produce development?
Where a business aims to introduce new products into existing markets
What are some factors of product development?
Emphasises on:
* Research & development and innovation
* Detailed insights into customers needs
* Being first to the market
What is diversification?
Where a business markets new products into new products
