Theme 3.1 - Business Objectives Flashcards
What is the ansoff matrix used for
Tool used for growth objectives
What 4 key concepts does the AM include
- Market Penetration
- Market development
- Diversification
- Product development
either old or new products in old or new markets
What is market penetration
Selling more products to existing customers, least risky
What is market development
Finding + exploiting new market opportunities for existing products e.g abroad
What is product development
selling new or improved products to existing customers e.g extension strategies
What is diversification
new customers with entirely new products, most risky
What are Porters generic strategies
Range of strategies that a business should adopt considering sources of competitive advantage and scope of market (niche/mass)
What are the two competitive advantages for mass markets
- Cost leadership
- Differentiation
What are the two competitive advantages for niche markets
- Cost focus
- Differentiation focus
What kind of tool is the Boston matrix
Portfolio analysis tool which considers the relative market share of a firms product + rate of growth within that market
What are stars
High growth and high market share, ongoing investments and have potential to become cash cows if manage correctly
What are question marks
High growth and low market share, significant investment required and high risk of becoming a dog
What are cash cows
Low growth and high market share, often generating more profit than needed to maintain, can fund other developments
What do Porters five forces show
Key pressures that impact Bs ability to compete with rivals
What are Porters five forces
- Industry Rivalry
- Supplier power
- Threat of new entry
- Buyer power
- Threat of substitutes
