Strategic focus and Expansion models Flashcards
what are the things part of ansoff matrix
market penetration
market development
product development
diversification
product development
develop related or unrelated products your customers value; product line extension
product development benefit
build on customer knowledge and brand equity
distribution strategies and product complementary/bundling
product development challenge
cannibalization
give up production efficiency
must know how to develop new product
what is cannibalization
rather then generating new sales, customers switch which product they buy.
adding costs but no new customers which is bad
product development tactics
extend product
repackage existing products
create bundles of complementary products that add value to eachother
product development diamond E questions
Can I leverage existing brand and/or distribution?
Can my facilities manage or do I have to build new ones?
Can I produce & sell at a profitable scale?
How much new product expertise will I need?
product development porters relation
if the products are not product line extensions but completely new and complementary, you are entering a new industry:
Will customers be willing to switch to my new product?
Rivalry: aggression?
Barriers to entry for this new industry?
market penetration
Sell more of existing product to existing target market = greater market share and/or greater purchase frequency
why do market penetration
build on what you have and know
no change
economies of scale in production and selling
do more of same=low cost per unit
market penetration challenges
competitor reaction
winning customers
market penetration tactics
Cut prices
Increase advertising, loyalty schemes
Increase distribution channels
Volume incentives
Buy a competitor
market penetration diamond e questions
Capabilities: Can I persuade customers to consume more of my product?
Resources: Do I have to use new distribution channels? Should I? Can I?
Resources: Do I have the production capacity to meet the increased demand?
market penetration porters questions
Buyers: Propensity to switch? Lock in/switching costs? Brand loyalty?
Rivalry: Fragmented vs concentrated, growing vs declining, aggressive vs passive competitor - How much share do I already have? Can it grow?
market development
Selling what you already produce to new target markets (market segments) or new geographic markets
why do market development
Capitalize on production capabilities
economies of scale
pursue less contested or larger market; diversification of customer base
market development challenge
customer access and awareness
market development tactics
Create awareness in new market – pitch benefits to new customers
Expand geographically
market development diamond e questions
Resources: Will this affect brand image? Should I use a different brand name?
Capabilities: Will the product need any adjustments? Can I make them?
Do I have the resources and capabilities to go international?
market development porters questions
Entry barriers: Can I access the distribution channels to reach this new market?
Are the customers accessible? Will they switch?
Rivalry: fragmentation, aggression, growth? Differentiation – are there market segments that are under-served?
diversification
chasing new customers with new products; creating new businesses
concentric/horizontal
vertical
conglomerate
concentric/horizontal
related products/services
similar market
vertical
moving up or down supply chain
conglomerate
unrelated industries/products
greatest risk
diversification benefit
diversify business portfolio by building new business
capitalize on existing capabilities in higher growth areas
diversification challenge
many activities and capabilities must be created or changed = high risk of failure
diversification tactics
Acquire other business
Use joint ventures and alliances
diversification diamond e questions
What new capabilities and resources will I need?
Can I build or buy them?
How much will I have to change operations? HR? structure?
diversification porters questions
Can I access the distribution channels to /enter reach this new market?
Are the customers accessible? Will they switch?
Rivalry: fragmentation, aggression, industry growth?
Other barriers to entry?
Can I access the needed suppliers?
what do you need to do for each quadrant
understand your:
company
customer
competition
product
what are the 4 questions to ask when deciding to go international
can we? - diamond e internal
should we? - diamond e external
where? - PEST, porters
how? - strategy
