4: Business Strategy Flashcards
What are the three levels of strategy?
Corporate strategy
- for business as a whole
Business strategies
- strategies for strategic business units
Functional operational strategies
What are the four stages of a strategic plan?
- Strategic analysis (where we are now)
- Strategic choice
- Strategic implementation
- Review and control
7 steps in the formal strategic plan
External and internal analysis
Corporate appraisal
Mission and objectives
GAP
Strategic choice
Strategy implementation
How does external analysis compare with internal analysis?
External - opportunities and threats
Internal - strengths and weaknesses
Features of static or dynamic environments?
Static/slow change
Single product/market
Simple technology
Safe environment
Dynamic changes
Diverse product/market
Different environment
Dangerous to stand still
What are the six aspects of a PESTEL analysis?
Political
Economic
Social and demographic
Technological
Ecological
Legal
What is involved in Porter’s five forces analysis?
Competitive rivarly!
- threat of new entrants
- threat of substitutes
- bargaining power of suppliers
- bargaining power of customers
What are the four types of competitor?
Brand - similar products
Industry - different markets and dist
Form - different products, same need
Generic - same disposable income
Four competitor reaction profiles?
Laid back - no response to competitor moves
Tiger - responds aggressively to all competitor mives
Selective - reacts to some threats but not all
Stochastic - difficult to predict when or how they will react
What are the resources in the 9Ms model?
Men/Women
Machines
Money
Material
Markets
Make up
Management
Methods
MIS
Describe Porter’s value chain analysis?
Used to analyse the sequence of business activities which add value
The margin is what is measured
Consists of primary activities and secondary activities
What is a Product Life Cycle analysis?
Application of life cycle theory to product or services
Presented as a diagram
These stages in order
- development
- introduction
- growth
- maturity
- decline
What is the BCG matrix and what are the four positions?
Analyses the balance of a business’s product portfolio based on a combination of both market growth and share.
Star
Question mark
Cash cow
Dog
Describe the star position in the BCG matrix?
Market share and growth are both high
Under constant threat from new entrants, business must continue to build
Cash neutral position
Describe the question mark position in the BCG matrix?
High market growth, low market share
Must decide whether to harvest or build
Negative cash flow
Describe the cash cow position in the BCG matrix?
High market share, low market growth
Reduced threat from new entrants
Business can hold position, or harvest for positive cash flow
Describe the dog position in the BCG matrix?
Low market share, low growth
Business must decide whether to divest, or hold position if modest cash flows are being made
What is a SWOT analysis?
Internal and external analysis combined
Used to perform a corporate appraisal to evaluate the strategic position of the organisation
Strength
Weakness
Opportunities
Threats
What are the four main types in Mendelow’s stakeholder matrix?
Minimal effort can be direct
Keep informed
Keep satisfied
Key players need participation
What are the two choices with strategies?
How to compete
How to grow
Porter: competitive advantage can be achieved by finding a position that competitors find hard to replicate
The four types in Porter’s strategies?
Cost leadership
(Broad target, lower cost)
Differentiation
(Differentiation, broad target)
Cost focus
(Narrow target, lower cost)
Differentiation focus
(Narrow target, differentiation)
What is the idea behind cost leadership?
Achieving a lower cost base than rivals allows the business to reduce prices
What is the idea behind differentiation?
Standing out due to product feature or consumer perception
What is the idea behind focus strategy?
Specialising on a clearly defined market segment
