Corporate strategy Flashcards
What is the Ansof matrix
Ansoff’s Matrix is a marketing planning model that helps a business determine its product and market growth strategy.
Show the risk levels in ansoff matrix
- market penetration-> existing market and product
2a. Market development -> new market+existing product
2b. Product development->existing market+new product - Diversification->new product and market
1 benefit of market development
requires little r and d
2 negatives of product development
- brand may be damaged if products fail
2. requires lots of R and D
2 ways how does one achieve market development
- operating online
2. selling in new geographical areas
How is diversification achieved
Organic growth or through mergers and takeovers
Negatives of diversification
High risk and few economies of scale
Porters strategic matrix definition
Finding a way a achieve competitive advantage
show porters strategic matrix
mass market |—cost leadership–|-differentiation
niche market |—cost focus——–|–differentiation focus
——————–|—-cost—————-|—differentiation
What does success of cost leadership depend on
price elasticities of demand
If the product is elastic a change in price Is likely to result in a heavy change in quantity demanded
How is cost leadership achieved
economies of scale
bargaining power from suppliers
high levels of efficiency
porters 5 forces
- threat of entrants
- threat of substitutes
- bargaining power of suppliers
- bargaining power of buyers
- level of competition
examples of low bargaining power of suppliers
eg tesco have a large buyer power over farmer. As they occupy such a large proportion of their sales they may be able to force them to lower prices
features of a high profit making industry
- weak suppliers
- weak buyers
- high barriers to entry
- weak rivalry
Examples of barriers to entry to reduce the threat of substitutes
- economies of scale
- Brand loyalty
- expertise and access to the best tech
examples of industries with high barriers to entry
- Sports shoe market- Nike has brand loyalty
- oil- high set up costs
- pharmaceuticals- expensive
what is porters 5 forces
a tool which can help inform a business whether the market they are going to enter is going to be profitable
What is SWOT analysis
a framework used to evaluate a company’s competitive position and to develop strategic planning.
WHAT DOES SWOT MEAN
Strengths (internal)
Weakness (internal)
Opportunities (external factors)
Threats (external)
Stakeholders
Have an interest in the business - but do not own it
May work for the business
Range of different interests depending on position
Shareholders
Own the business
May also work in the business
Interest in growing value of their shareholiding
