theories of corporate strategy and SWOT Flashcards
what is ansoff’s matrix used for?
to help businesses grow - allows the business to determine its corporate strategy
market penetration
existing product existing market
product development
existing market new product
market development
new market existing product
diversification
new product new market
how can a business achieve market penetration?
- increase the brand loyalty of customers so they don’t substitute the brand
- encourage conumers to use the product more regularly or to use more of the product
how can a business achieve product development?
marketing plays a large role in product development, and lots of technology and innovation is involved
how can a business achieve market development?
need a lot of market research as the business needs to find out wants and needs within that market
how can a business achieve diversification?
diversification is high in risk, and requires a lot of research, and there are many barriers to entering new markets that a business will need to overcome
what is Porter’s Strategic Matrix used for?
used to identify the sources of competitive advantage a business might achieve in a market
cost leadership
Porter’s Strategic Matrix
striving to be the lowest cost provider in the market, doesn’t always mean they offer the lowest prices. they do this by operating on a large scale and exploiting e.o.s. they will compete in 2 ways:
* increase profits while still charging market level prices
* increase market share while still charging lower prices (low costs)
differentiation
Porters Strategic Matrix
a business operating in a mass market but adopting a unique position instead of lowest cost position - they will do so through adding value to their products
focus
Porters Strategic Matrix
targeting a narrow range of customers, usually used by smaller firms, they can do this through:
- cost focus: cost minimisation in a focused or niche market
- differentiation focus: developing more of a USP within the market, developing a niche
distinctive capability
a form of competitive advantage that cannot be easily replicated by a competitor
what does Kays capabilities consist of?
knowing what strengths are and using them to achieve competitive advantage:
- architecture - organisation or relationship with stakeholders
- reputation - brand image, quality
- innovation - developing new products or processes
