Theories Of Corporate Strategy Flashcards
What is Corporate strategy?
The overall scope and direction of a business and the way in which its various business operations work together to achieve particular goals
What is a soft matrix?
A business can identify all their current products or services and their markets, then consider their future options for expansion using the matrix shown
What are the Limitations of Ansoff’s Matrix?
• It only shows part of the picture
• It oversimplifies the market
• Large MNCs may need thousands of sub options and strategies
What is porters matrix?
Porter suggested that there were 3 generic business strategies that would get competitive advantage. These were:
-cost leadership
-differentiation
-focus
What is cost leadership in porters matrix?
making products at the lowest cost, may include outsourcing, lean management, standard no frills low cost products
What is differentiation in porters matrix?
the product or service is unique and the USP adds value to the product
What is focus in porters matrix?
the product or service will serve a very small specific niche, high costs are passed on to customers, no close substitutes
What are the uses or porters matrix?
it establishes a clear direction for the business to go in
Identifies when a business may be in trouble
What are the limitations of porters matrix?
• Not as relevant in very dynamic markets
• May not be useful in a crisis situation • Over simplifies the market structure
What is the Boston matrix?
It looks at two dimensions, market share and market growth, in order to assess new and existing products in terms of their market potential
What are the uses or the Boston matrix?
• The BCG matrix is a good starting point when reviewing an existing product line to decide future strategy and budgets
• The BCG helps businesses analyse future opportunities or problems with their product portfolios
What are the limitations of the Boston matrix?
Growth rate and relative market share are not the only indicators of profitability. This model ignores and overlooks other indicators of profitability
What are Kay’s Distinctive Capabilities?
• Architecture – relationships with employees, suppliers, customers • Reputation – through the customer experience
• Innovation – bringing inventions to market
