Theories Flashcards
Ansoff Matrix Definition
New or existing products in new or existing markets, suggested growth strategies
Ansoff Matrix Diagram
Balance Scorecard Definition
Help firms measure business performance with both financial and non-financial methods
Balance Scorecard Diagram
Bartlett and Ghoshal Model of International Strategy Definition
The strategic options for businesses wanting to manage their international operations based on two pressures: pressure of local responsibility and global intergration.
Bartlett and Ghoshal Model of Internation Strategy Diagram
Key Features of a Global Strategy
- Highly centralised
- Focus on efficiency
- Little sharing of expertise locally
- Standardised products
Key Features of an Transnational Strategy
- Complex to achieve
- Aims to maximise local responsiveness but also gain benefits from global intergration
- Wide sharing of expertise
Key Features of an Internation Strategy
- Aims to achieve efficiency by focusing on domestic activities
- Largely managed centrally
- Relatively little adaption of products to local needs
Key Features of a Multi-Domestic Strategy
- Aims to maximise benefits of meeting local needs through customisation
- Decision-making decentralised
- Local business treated as a seperate business
- Strategies for each country
Blake Mouton Grid Definition
Map of different managerial styles
Blake Mouton Diagram
Boston Matrix Definition
A model which helps businesses analyse their portfolio or businesses and brands.
Boston Matrix Diagram
What are Stars in Boston Matrix
- High growth products
- Need heavy investment
- Become cash cows
- Competitive
What are cash cows?
- Low-growth products
- Mature successful products
- Little investment
- Managed for continued profit
What are question marks?
- Low market share operating in high growth markets
- Have potential but need huge amounts of investment
- Managers choose which have potential
What are dogs?
- Low market share in unattractive markets
- May break-even
- Not worth investing in
- Sold or closed
Bowmans Clock Definition
Explores options for strategic positioning, a business has a variety of options to position a product
Bowmans Clock Diagram
Bowman’s Clock Position 1
Low Price, Low Added Value
- Not competitive for a business
- No product differentiation
- Bargain strategy
Bowman’s Clock Position 2
Low Price
- Low cost-leaders in a market
- Cost minimisation is required
- Profit margins are low but high output can still generate high profits
- Price wars
Bowman’s Clock Position 3
Hybrid
- Low price, product differentiation
- Persuade customers that reasonable price can have good added value
- Can be very effective if added value is consistent
Bowman’s Clock Position 4
Differentiation
- Highest level of perceived added value
- Branding is key
- Customer loyalty can make this the most effective
Bowman’s Clock Position 5
Focus Differentiation
- Highest price with high added value
- Luxury brands
- Highly targetting segmentation, promotion and distribution
- Can lead to very high profit margins
- Sustainable long term strategy
Bowman’s Clock Position 6
Risky High Margins
- Doomed to failure
- High prices with no extra percieved added value
- Long term is an uncompetitive strategy
- Customers will find a cheaper alternative
Bowman’s Clock Position 7
Monopoly Pricing
- Only business in market
- No alternatives so high pricing
- Regulation stops this
Bowman’s Clock Position 8
Loss of Market Share
- Recipie for failure in a competitive market
- Standard price with low added value
- Much better alternatives for the same price
Carroll’s CSR Pyramid Definition
Simple framework that helps argue how and why organisations should meet their socail resposibilities
Carroll’s CSR Pyramid Diagram
Strengths of CSR Pyramid
- Easy to understand
- Simple message
- Emphasises importance of profit
Weaknesses of CRS Pyramid
- Too simplistic
- Should ethics be at the top
- Businesses don’t always claim what they do
Core Competetencies Definition
Capabilities critical to businesses achieving competitive advantages
3 Factors for Core Competencies
- Provides potential access to a wide variety of markets
- Makes a significant contribution to the perceived customer benefits of the end product
- Difficult for competitiors to imitate
Economies of Scale
When costs fall as output rises
Diseconomies of Scale
When businesses grow too large that their unit costs increase
Reasons for Diseconomies of Scale
- Lack of Motivation, employees feel more isloated in a large business. Harder for managers to stay in constant contact and build up relationships
- Poor Communication, Chain of command becomes harder to communicate through, wide span of control and hierarchy mean messages can get mixed up.
- Loss of Direction and Co-ordination, Hard to ensure all workers are working to the same goal, harder to supervise. More delegation means less control
Types of EOS
- Technical as businesses can afford to invest in specialist capital.
- Specialisation of the workforce, Split complex production processes into smaller tasks to boost productivity.
- Marketing, spread large advertising and marketing budget over a large output (bulk buying)
