6.2

Question 1

What are different strategies used to help a business achieve a competitive advantage?

Answer 1

Joint venture
Diversification
Horizontal and vertical integration
Change product or service provision
Change market positioning
Rebranding
Retrenchment

Question 2

What is a joint venture?

Answer 2

Businesses teaming up to share one another’s advantage

Question 3

What is diversification?

Answer 3

High-risk strategy for businesses entering a new market or existing ones in a mature or declining market

Question 4

What are the different factors of diversification?

Answer 4

Huge R&D costs to develop and create a new product
Involves a change in the strategic direction so the business needs to gain a thorough understanding of the new market
Needs a USP to achieve a competitive advantage

Question 5

What is horizontal and vertical integration?

Answer 5

Can be adopted by businesses entering a new market to gain new knowledge or skills, or in a mature or declining market to regain market share and growth

Question 6

What is changes in product or service provision?

Answer 6

Business operating in a mature or declining market, changes the way its product or service reaches its customer through different channels of distribution

Question 7

What is changing market position?

Answer 7

Changing customers perception of a business’s image through brand manipulation in a mature or declining market position; often involves comparative ads

Question 8

What is rebranding?

Answer 8

Changing consumer perception of a brand in a mature or declining market position through extensive marketing campaigns

Question 9

What is retrenchment?

Answer 9

Cutting expenses
Involves a change in strategic direction