BM Tools Flashcards
STEEPLE
External Factors
Sociocultural
Technological
Economic
Environmental
Political
Legal
Ethical
SWOT
Internal factors
Strengths
Weaknesses
Opportunities
Threats
Ansoff Matrix
lowest risk: existing market, existing product =market penetration
existing market, new product: product development
new market, existing product: market development
highest risk: new market, new product = diversification
ansoff: market penetration
low risk
selling more of the same products and services to the same customer
- changing price, promotion or distribution
ansoff: product development
medium-risk
new products to same customers
ansoff: market development
medium-risk
existing products in new markets
ansoff: diversification
high-risk
new products in a new market
related diversification: new industry has similarities with company’s existing industry
unrelated diversification: new industry with no similarities with the company’s existing industry
business plan
- official document with details of an organization and the proposals for reaching its aims and objectives
- may have background info on the organisation, key staff, market research findings, competitor analysis, planned marketing strategy and details of financial position
- vision and mission statement
- problem the product solves
- strategy for growth
- future needs and direction
- entrepreneurs make informed decisions
- secure sources of finance and attract potential investors
Porter’s Generic Strategies
how to respond to external competitive environment
broad target, lower cost: cost leadership
narrow target, lower cost: cost focus
broad target, differentiation: differentiation
Differentiation, narrow target: differentiation focus
stuck in the middle
Porter’s: cost leadership
business becomes low-cost producer in the industry
very large business = economies of scale
better for standardised products, with less opportunity to differentiate through product quality, branding or promotion
Porter’s: diversification
business producing a specialised or differentiated product for a broad market
find USP of product and make it the best in the industry in that point
Porter’s: cost focus (niche market)
business becomes the low-cost producer in a niche market
Porter’s: differentiation focus (niche market)
business producing a specialised or differentiated product for a niche market
very high quality product and is very exclusive/ provides special characteristic
Porter’s: Stuck in the middle
not differentiated enough and not cheap enough
Boston Consulting Group (BCG) Matrix
classifies products of a business into high and low market share growth categories
high market growth, low market share: problem child
Low market growth, low market share: dogs
high market growth, high market share: Stars
Low market growth, high market share: Cash cows
cash cows (BCG)
high market share, low market growth
successful products in mature, slower-growing markets
- high sales revenue from an established customer base
- high customer loyalty
(less money for marketing)
dogs (BCG)
low market share, low market growth
products at end of product life cycle or niche products in mature low-growth markets
stars (BCG)
high market share, high market growth
- revenues growing strongly
- requires significant investment to sustain growth
- marketing: attracting new customers and establishing brand image
Problem child (BCG)
low market share, high market growth
aka question marks
- products recently launched in response to rapidly growing revenues of competitors
- require significant investment to gain market share
- probably negative cashflow
limits of BCG matrix
- does not account for other factors in external environment
- info subjective
