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Business theme 3 > theme 3 > Flashcards

theme 3 Flashcards

1
Q

What is market mapping?

A

Way of firms analysing competing in the industry and identify gaps in the market

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2
Q

draw a market map

A

HIGH PRICE

LOW QUALITY HIGH QUALITY

                   LOW PRICE
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3
Q

What is market positing?

A

the area in the market businesses decide they want to go

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4
Q

What can businesses gain from identifying new gaps

A

new markets-new consumers-and be more competitive

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5
Q

how did ansoff say a business could be competitive 4 ways?

A

penetration
diversification
market development
product development

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6
Q

What is penetration? Which area?

A

existing products in existing firms
least risk

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7
Q

Why is penetration least risky?

A

because your not spending costs on creating a new product.
you already know consumers well

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8
Q

How is penetration risky?

A

If you don’t innovate like Nokia you will be pushed out the market with more innovative businesses (apple)

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9
Q

What is product development? Where is it?

A

new products and existing markets

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10
Q

How is it risky?

A

Innovating and creating new products/ideas is costly.
Your not guaranteed success

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11
Q

Which companies usually use product development?

A

phone companies - they usually target existing customers.

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12
Q

What is market development?

A

Selling existing products in new markets

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13
Q

What are the benefits of market development? Give an example of a company.

A

You need need to spend much on innovation because your using existing products.
E.g Lucazade- origanilly product was medicine they advertised it as a energy drink for atheletes to drink

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14
Q

What are the risks of market development?

A

costly to research new markets

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15
Q

What is diversification?

A

New products in new markets.

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16
Q

What are the risks of diversification?

A

Costly to develop new products and research them.

17
Q

What are the benefits of diversification?

A

Can bring rapid growth and demand
enter new markets and new consumers
potential for growth is greater.

18
Q

What is Porters generic matrix?

A

How producers are going to position themselves into a market so consumers choose them over rivals.

19
Q

What are the 2 ways Porter said a businesses can gain competitive advantage?

A

Diversification
low cost producer

20
Q

How can diversification achieve competitive advantage?

A

You differentiate yourself from other rivals in the market through:
quality
power of tech e.g
customer service
after care ( warranty )
distribution ( maybe your most convenient to them)
you tell them why they should pay more for your product.

21
Q

What is a low cost producer?

A

Business produces cheapest - if not consumers will move to cheaper producer.

22
Q

How can a business drive the costs of another business up?

A

Patent - e.g Dyson wireless vacuum
Barriers to entry- Costs of production are lower than new entrants.

23
Q

What methods can a business carry out to be different?

A

Market segmentation

24
Q

What are barriers to entry?

A

Costs that new entrants have to incur when joining a new market.

25
Q

What does SWOT analysis stand for?

A

Strengths , weakness , opportunities and threats.

26
Q

Draw a Swot diagrm?

A

Strengths opportunity

weakness threats

27
Q

What are weaknesses to Swot?

A

It doesn’t guarantee success. A random threat you never knew of my come through

28
Q

How can PESTEL lead to failure of SWOT?

A

Pestel e.g - Legal - governments may ban or place legislation which may include tarrifs.

29
Q

What is PESTLE?

A

External factors which may affect a business

30
Q

What do the letters in PESTLE stand for?

A

Political
Economical
Social
Technological
Environmental

31
Q

What is political?

A

Government intervention e.g in monopolies - they might add price caps - they are only allowed to increase their prices by a certain amount each year.

32
Q

What is economic?

A

exchange rate, inflation and recession, unemployment high or low.
High unemployment - more skilled workers you can hire then and not spend costs on training them.
Consumer income
consumer confidence

33
Q

What is social?

A

Demographic changes - Uk has lots of migration, aging.
Lifestyle changes- e.g quick delivery
fashion changes , new tastes

34
Q

What is technological?

A

New technology advancements
Working from home - reduces costs.

35
Q

What is legislation?

A

e.g minimum wage , health and safety laws

36
Q

What is environmental

A

moving to green tech
fair trade (means you may change supply chain)

Business theme 3 (1 decks)

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