Corporate strategy

Question 1

What is the Ansof matrix

Answer 1

Ansoff’s Matrix is a marketing planning model that helps a business determine its product and market growth strategy.

Question 2

Show the risk levels in ansoff matrix

Answer 2

1. market penetration-> existing market and product
   2a. Market development -> new market+existing product
   2b. Product development->existing market+new product
2. Diversification->new product and market

Question 3

1 benefit of market development

Answer 3

requires little r and d

Question 4

2 negatives of product development

Answer 4

1. brand may be damaged if products fail

2. requires lots of R and D

Question 5

2 ways how does one achieve market development

Answer 5

1. operating online

2. selling in new geographical areas

Question 6

How is diversification achieved

Answer 6

Organic growth or through mergers and takeovers

Question 7

Negatives of diversification

Answer 7

High risk and few economies of scale

Question 8

Porters strategic matrix definition

Answer 8

Finding a way a achieve competitive advantage

Question 9

show porters strategic matrix

Answer 9

mass market |—cost leadership–|-differentiation

niche market |—cost focus——–|–differentiation focus

——————–|—-cost—————-|—differentiation

Question 10

What does success of cost leadership depend on

Answer 10

price elasticities of demand

If the product is elastic a change in price Is likely to result in a heavy change in quantity demanded

Question 11

How is cost leadership achieved

Answer 11

economies of scale
bargaining power from suppliers
high levels of efficiency

Question 12

porters 5 forces

Answer 12

1. threat of entrants
2. threat of substitutes
3. bargaining power of suppliers
4. bargaining power of buyers
5. level of competition

Question 13

examples of low bargaining power of suppliers

Answer 13

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

Question 14

features of a high profit making industry

Answer 14

1. weak suppliers
2. weak buyers
3. high barriers to entry
4. weak rivalry

Question 15

Examples of barriers to entry to reduce the threat of substitutes

Answer 15

1. economies of scale
2. Brand loyalty
3. expertise and access to the best tech

Question 16

examples of industries with high barriers to entry

Answer 16

1. Sports shoe market- Nike has brand loyalty
2. oil- high set up costs
3. pharmaceuticals- expensive

Question 17

what is porters 5 forces

Answer 17

a tool which can help inform a business whether the market they are going to enter is going to be profitable

Question 18

What is SWOT analysis

Answer 18

a framework used to evaluate a company’s competitive position and to develop strategic planning.

Question 19

WHAT DOES SWOT MEAN

Answer 19

Strengths (internal)
Weakness (internal)

Opportunities (external factors)
Threats (external)

Question 20

Stakeholders

Answer 20

Have an interest in the business - but do not own it
May work for the business
Range of different interests depending on position

Question 21

Shareholders

Answer 21

Own the business
May also work in the business
Interest in growing value of their shareholiding