choosing strategic direction

Question 1

What is ansoff matrix

Answer 1

tool for comparing the level of risk involved with the different growth strategies.

Question 2

Existing market and existing product

Answer 2

Market penetration - trying to increase your market share using sales promotion and pricing strategies

Question 3

Existing market and new product

Answer 3

Product development - good when the market has good growth potential and the business has high market share and good R&D.

Question 4

New market and existing product

Answer 4

Market development - different segment of market or a company e.g. Nike expanding into Asian markets

Question 5

New market and new product

Answer 5

Diversification - very risky and usually used when a business needs to reduce dependence on a limited product range.

Question 6

Strategic position

Answer 6

choosing how to compete with other businesses in the market.

Question 7

Porter’s two types of competitive advantage

Answer 7

Cost advantage
Differentiation advantage- better products, USP, innovation

Question 8

Broad market scope and cost advantage

Answer 8

Cost leadership eg Accessorize

Question 9

Broad market scope and differentiation advantage

Answer 9

Differentiation

Question 10

Cost advantage and narrow market scope

Answer 10

Cost,focus - niche market segments usually used with higher brand loyalty

Question 11

Differentiation advantage and narrow market scope

Answer 11

Differentiation, Focus