8 - Strategic Direction

Question 1

Describe Strategic Direction
(2 Points)

Answer 1

~ Is the route that a business has chosen to follow, in order to achieve its corporate objectives.

~ Influences markets a business chooses to compete in and the products it offers.

Question 2

What Are Influences On Strategic Direction?
(5 Points)

Answer 2

~ Corporate objectives.

~ Core competences.

~ Competitive environment.

~ Leaders attitudes to risk.

~ Economic environment.

Question 3

What Does Ansoffs Matrix Show?

Answer 3

Options available to a growing business, of how it can compete withs its rivals.

Question 4

Describe ‘Market Penetration’ Of Ansoffs Matrix
(3 Points)

Answer 4

~ Existing products and markets.

~ Aim -> Increase market share, by selling more within the same market.

~ Least risky as no research has to be done to enter new markets, so lower costs.

Question 5

What Are Issues With Market Penetration?

Answer 5

Saturated market means not much opportunity for growth.

Question 6

Describe ‘Product Development’ Of Ansoffs Matrix
(3 Points)

Answer 6

~ Existing markets, new products.

~ Medium risk, no market research but does not product research which costs.

~ Would depend on business size, power and audience on its effectiveness.

Question 7

What Are Issues With Product Development?

Answer 7

Might need some market research, to tailor goods.

Question 8

Describe ‘Market Development’ Of Ansoffs Matrix
(3 Points)

Answer 8

~ Existing products, new markets.

~ Can be by geographical markets, new distribution channels and different pricing policies to attract new customers.

~ Medium risk, no product research but market research is required.

Question 9

Describe ‘Diversification’ Of Ansoffs Matrix
(3 Points)

Answer 9

~ New markets, new products.

~ Very risky, lots of market and product research, increasing costs.

~ If successful spreads overall risk of the business.