Chapter 10-Strategic positioning

Question 1

what were the three strategies that porter suggested businesses that wanted to be successful should take?

Answer 1

Low cost strategy, differentiation and focus

Question 2

how can a low cost strategy be successful?

Answer 2

• Capital to invest in tech to reduce production costs
• greater economies of scale to pass on lower prices
• constantly search for cheaper suppliers
• Use leanest production process
• Drive up costs of rival through patents and barriers to entry

Question 3

what is a low cost strategy?

Answer 3

pursuing a strategy of low cost in order to become the lowest cost producer in the industry (in order to pass on lower prices)

Question 4

what is product differentiation

Answer 4

the degree to which consumers see a particular as being different from other brands because of a USP.

Question 5

what does porter mean by a focus strategy?

Answer 5

when a businesses uses either low cost strategy or differentiation within the niche market

Question 6

what is the criticism of porters generic strategies?

Answer 6

the range of strategic positions is too limited

Question 7

what are the 5 strategies a business can choose which will be successful according to bowman?

Answer 7

Low price/low value
Low price/same value as competitors
Hybrid:moderate price and moderate value
Differentiation: moderate price/high value
Focused differentiation (niche):High price/ High quality

Question 8

what are the 3 strategies a business can choose which will be unsuccessful according to bowman?

Answer 8

Increased price/standard value
High price/low value
standard price/ low value

Question 9

how has ryanair undergone a low cost strategy?

Answer 9

• purchased second hand boeings or bought them when world prices were low
• flew to smaller airports to get cheaper deals
• only buying one type of aircraft so that the engineers know it off by heart and can repair them quickly
• working the staff hard