SWOT Flashcards
Which are the factors that should be reviewed in terms of opportunities and threats in order to determine the attractiveness of a market?
size of the market, growth of the market and competitive structure of the market (competitor hostility, supplier power, threat of substitutes, buyer power, threat of new entry, the cyclicality of the market, market risks)
Which are the factors that should be reviewed in terms of a firm’s strengths and weaknesses in order to determine the attractiveness of a market?
Cost factors (fixed and variable costs)
Differentiation factors
What has a grater impact on corporate value?
Competitive advantage (not market attractiveness). The variation of probability within an industry exceeds variation between industries
And which competitive advantage is more vulnerable? Cost advantage or differentiation advantage?
Both are sustainable over the long term
What should the strategic market objective be?
Strategic objectives have been conceptualized and organized in “capital rationalizing models” based on the premise that capital is a scarce resource. We have 2 models: BCG matrix and Arthur D. Little Model.
Based on the variation of the GE-McKenzie matrix what are the 5 strategic objectives? Choose 2 and related them.
The 5 strategic objectives are: grow, enter, harvest, divest and maintain.
How do you assign the market to the objective?
The assignment depends on whether investment in the market is likely to generate positive net present value for the firm.
And what are the strategic determinants for that assignment?
1) Market attractiveness
2) differential advantage
Chose two strategic objectives and explain how they form a strategic focus
The focus depends on the strategic objective.
1 answer: Enter and grow, the objective of these two strategic objectives is to increase the sales volume by investing more on the products/services that the company sells.
2 answer: maintain, harvest or divest, the objective of these three strategic objectives is to increase productivity, because if a product isn’t profitable, than we should not invest and spend more money on the product. So we will have an increase of productivity by having more products produced (output) using less input (investment) since productivity is defined by the ratio between the output volume and the volume of the inputs.
Which marketing tasks are involved with a volume focus?
Expand the market by convert non-users, enter new market segments and increase the usage rate.
Market penetration by wining competitor’s customers.
Which marketing tasks are involved with a productivity focus?
Reduce costs, Increase prices, enhance product mix
What is the definition of focus?
Focus is when a business or product/service offering concentrates on a limited number of key competitive factors what makes the strategy easier to communicate and execute.
