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A-level Business > 8 - Choosing Strategic Direction🚀 > Flashcards

8 - Choosing Strategic Direction🚀 Flashcards

1
Q

The Ansoff Matrix

What is it called if it is an existing product in an existing market?

A

Market penetration

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2
Q

The Ansoff Matrix

What is it called if it is an existing product in a new market?

A

Market development

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3
Q

The Ansoff Matrix

What is it called if it is a new product in an existing market?

A

Product development

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4
Q

The Ansoff Matrix

What is it called if it is a new product in a new market?

A

Diversification

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5
Q

The Ansoff Matrix

What is the benefit for a business who is in market penetration?

A

Leads to increasing market share which will drive out competition

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6
Q

The Ansoff Matrix

What is the benefit for a business who is in product development?

A

They are the first to market and understand customer needs

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7
Q

The Ansoff Matrix

What is the benefit for a business who is in market development?

A

Selling via new channels to a new demographic leads to a change in pricing strategies

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8
Q

The Ansoff Matrix

What is the benefit for a business who is in diversification?

A

Can increase product portfolio but is the most risky

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9
Q

Porter’s strategies

What is the criteria for cost leadership?

A

Low cost, mass market

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10
Q

Porter’s strategies

What is the criteria for differentiation leadership?

A

Premium price, mass market

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11
Q

Porter’s strategies

What is the criteria for cost focus?

A

Low cost, niche market

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12
Q

Porter’s strategies

What is the criteria for differentiation focus?

A

Premium price, niche market

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13
Q

Porter’s strategies

What does cost leadership involve?

A
  • high productivity
  • high capacity utilisation
  • bargaining power
  • lean production
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14
Q

Porter’s strategies

What does differentiation leadership involve?

A
  • high product quality
  • strong branding
  • industry-wide distribution
  • consistent promotions
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15
Q

Porter’s strategies

Give an example of a cost leadership business

A

Aldi, Ryanair, Poundland

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16
Q

Porter’s strategies

Give an example of a differentiation leadership business

A

Apple, Nike

17
Q

Porter’s strategies

What does cost focus involve?

A
  • basic products
  • acceptable to customers
  • small
18
Q

Porter’s strategies

Give an example of a cost focus business

A

local poundshop

19
Q

Porter’s strategies

What does differentiation focus involve?

A
  • very niche
  • need to meet needs and wants of customer
20
Q

Porter’s strategies

Give an example of a differentiation focus business?

A

Ferrari

21
Q

Bowman’s Strategic Clock

What are the axis?

A

Perceived value to the consumer, price

22
Q

Bowman’s Strategic Clock

What is strategy 1?

A

Low price & low added value

23
Q

Bowman’s Strategic Clock

What is strategy 2?

A

low price

24
Q

Bowman’s Strategic Clock

What is strategy 3?

A

Hybrid

25
Q

Bowman’s Strategic Clock

What is strategy 4?

A

Differentiation

26
Q

Bowman’s Strategic Clock

What is strategy 5?

A

Focused differentiation

27
Q

Bowman’s Strategic Clock

What is strategy 6?

A

Risky high margins

28
Q

Bowman’s Strategic Clock

What is strategy 7?

A

Monopoly pricing

29
Q

Bowman’s Strategic Clock

What is strategy 8?

A

Loss of market share

30
Q

Bowman’s Strategic Clock

What does low price and low value added 1 mean?

A

Not competitive position - only way to stay competitive is to market as “cheap as chips”

31
Q

Bowman’s Strategic Clock

What does low price 2 mean?

A

Cost minimisation - profits from high volume sold

32
Q

Bowman’s Strategic Clock

What does hybrid 3 mean?

A

Product differentiation - persuades consumers that there is good added value and a reasonable price

33
Q

Bowman’s Strategic Clock

What does differentiation 4 mean?

A

Highest level of perceived added value - high quality combined with strong brand loyalty

34
Q

Bowman’s Strategic Clock

What does focused differentiation 5 mean?

A

Highest price levels and high perceived value = luxury brands

35
Q

Bowman’s Strategic Clock

What does risky high margins 6 mean?

A

High prices without offering anything extra in terms of perceived value

36
Q

Bowman’s Strategic Clock

What does monopoly pricing 7 mean?

A

Only one business offering the product so no choice for customers

37
Q

Bowman’s Strategic Clock

What does loss of market share mean?

A

Setting middle-range price for product with low perceived value

38
Q

Bowman’s Strategic Clock

Which strategies should a business avoid because price is greater than perceived value?

A

6, 7 and 8

39
Q
A

A-level Business (10 decks)

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