Choosing a strategic position (8) Flashcards
1
Q
What are the 3 tools that a business can use to help pick a strategic position?
A
- Ansoff’s Matrix
- Bowman’s Clock
- Porter’s Generic Strategies
2
Q
State 3 external factors that affect the choice of strategy
A
- Changes in technology
- Law
- Competitors’ Actions
3
Q
State 3 internal factors that affect the choice of strategy
A
- Financial Costs
- Ability to innovate
- Shareholders’ attitude to risk
4
Q
What are the axis for Porter’s Generic Strategies?
A
- Niche/Mass
- On Price/Differentiation
5
Q
What are the four strategies on Porter’s Generic Strategies?
A
- Cost Leadership
- Cost focus
- Differentiation leadership
- Differentiation focus
6
Q
Explain ‘Cost Leaderhsip’ (ryanair)
A
- Large sales volume
- Economies of scale
- Cost Minimisation
7
Q
Explain ‘Differentiation leadership’
A
- Strong USP
- Focus on innovation
- High profit margins
- Developing brand loyalty
8
Q
What are the cons with Porter’s Generic Strategies?
A
- Too simplistic
- Being in the middle doesn’t necessarily mean failure.
9
Q
How many strategies are there for Bowman’s Clock and what is the axis?
A
- 8
- Low perceived value
- Price
10
Q
Position 1 on Bowman’s Clock
A
- Low Perceived Value and Price
- Generic product with low profit margins
11
Q
Position 2 on Bowman’s Clock
A
- Low Price
- Cost leadership + some perceived value
12
Q
Position 3 on Bowman’s Clock
A
- Hybrid
- Balance between price and perceived value
13
Q
Position 4 on Bowman’s Clock
A
- Differentiation
- Strong USP + Differentiation
14
Q
Position 5 on Bowman’s Clock
A
- Focused Differentiation
- Premium Prices + High profit margins
- Specialist niche market
15
Q
Position 6 on Bowman’s Clock
A
- Risky high margins
- New + high tech products which attract early adopters
- Focus on innovation
