Strategic Clock and Ansoff Matrix Flashcards
What is strategic clock?
It is a model that explores options for strategic positioning. Achieving competitive advantage by supplying what the customer wants more effective than competitors in terms of price or value perceived.
What does strategic clock consist of? (8)
- Low value Low Price
- Low Price
- Hybrid
- Differentiation
- Focused differentiation
- Risky high margins
- Monopoly
- Loss of market share
How do we sustain competitive advantage?
Sustaining strategic capabilities such as producing gods which are valued, rare and robust.
Price based strategies. What should we focus on?
- Winning price wars
- Cost efficiency
- Accepting Lower Margins
For Differentiation based strategies what should we focus on?
- Producing goods hard to imitate
- Imperfect mobility of resources
- Re-Investing Margins
What is Lock In strategies?
It can work for both price based strategies. Even if the product is not the best or cheapest. These products become industry standards like Microsoft windows, Dolby, Internet Explorer.
(It is just inconvenience or expensive to switch to rivals)
Ansoff Matrix is by who?
Igor Ansoff
What is Ansoff Matrix?
It is a corporate growth strategy
Explain how Ansoff Matrix works?
Penetration - Market and product exists.
Market Development - Product exist but market is now.
Product Development - Market exists but the product is new.
Diversification - Product is new and Market is New.
What is market penetration?
Achieving growth with existing products in their current market segment aiming to increase market share.
If its a growing market just maintaining will increase Market share.
What is Market development?
Firm achieves growth by targeting existing products to new market segments.
This is more important if the firms core competence is related to specific product rather than the experience with specific markets. Its riskier than market penetration.
What is Product development?
This is appropriate when firms strengths are more related to specific customers rather than the specific product itself.
New products are based on target existing customers. It’s more riskier than market development which is just aimed to increase market share.
What is Diversification?
This is the most riskiest of the 4 growth strategies as it requires both market and product development and might be outside the core competencies of the firm.
The risk might be set off by high profit margins. Although it might reduce business portfolio risk and enable the firm to enter an attractive industry.
