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AA IB Business HL > Tools > Flashcards

Tools Flashcards

1
Q

What are internal threats?

A

Constraints within a firm’s own control

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2
Q

What are examples of internal constraints?

A

finance
people
marketing
production

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3
Q

Go over each of the SWOT factors.

A

Strengths - things the business does well/better than competitors
Weaknesses - things that the organisation does not do so well
Opportunities - external factors that provide prospects for success
Threats - external factors that hold back the business

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4
Q

Advantages of using SWOT

A
  • useful and visual
  • broad range of applications
  • helps managers to understand market position
  • helps to reflect
  • examination of strategic opportunities
  • facilitates strategic thinking
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5
Q

Disadvantages of using SWOT

A
  • static, only a snapshot, can be quickly outdated
  • requires honesty
  • may be errors/biases/omissions
  • does not guarantee a strategy’s success
  • needs to be used with others
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6
Q

What is a SWOT analysis?

A

a bus management tool that provides a framework for strategic analysis and decision making

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7
Q

What is the Ansoff matrix?

A

a strategic decision-making tool used to devise product and market growth strategies for an organisation

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8
Q

What is market penetration?

A

developing existing markets with existing products.
increase sales revenue and market share.

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9
Q

What are features/advantages of market penetration?

A
  • relatively low risk
  • strategies to increase usage rate of existing customers
  • little need for investment expenditure/market research
  • to gain market dominance in growing markets or reduce competition in mature markets
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10
Q

What is market development?

A

selling existing products in new markets

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11
Q

What are features of market development?

A

relies on a greater distribution network to go to different places
riskier - might not succeed
may be expensive, especially if overseas

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12
Q

What is product development?

A

introducing new products to existing customers

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13
Q

What are features of product development?

A

product differentation
remain/improve competitiveness
riskier - can be expensive
products developed to replace others
marketed at current customers

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14
Q

What is diversification?

A

organisations moving into new markets with new products

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15
Q

Is diversification risky?

A

It is high-risk since they company does not have experience/expertise in the market, rivals may have already established themselves with brand recognition and customer loyalty

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16
Q

What are the two types of diversification?

A

related and unrelated

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17
Q

What is related/unrelated diversification?

A

related- orgs. operate within the same industry
unrelated- orgs. enter new industries

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18
Q

What is unrelated diversification?

A

orgs enter new industries

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19
Q

Summary of market penetration - brief

A

low risk
familiar markets
changing marketing mix
competitors retaliate

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20
Q

Summary of product development - brief

A

medium risk
product extension
acquisition
brand extension

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21
Q

Summary of market development - brief

A

medium risk
familiar product
new supply chains
changing marketing mix
unknown markets

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22
Q

Summary of diversification - brief

A

high risk
spread risks
new products
new markets
high reward prospect
loss of focus on core

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23
Q

What are some limitations of the Ansoff matrix?

A

only considers 2 dimensions of growth
doesn’t quantify risks/rewards
still requires further research and analysis

24
Q

What are sociocultural factors? (STEEPLE)

A

all sociocultural characteristics of a region
demographics, lifestyle, beliefs, values
affects what people choose to buy

25
What are technological factors? (STEEPLE)
new technologies changes how a business operates and the products it makes technological development includes infrastructure
26
What are economic factors? (STEEPLE)
changes in economic conditions, GDP cycles of GDP - business cycle income increase/decrease changes what people want to buy
27
What are environmental factors? (STEEPLE)
natural disasters or conditions may affect products businesses that rely on natural resources climate change increased protection of nature may be harmful to businesses
28
What are political factors? (STEEPLE)
may change laws unstable government Green parties
29
What are legal factors? (STEEPLE)
multinational companies - home country and host country laws complying with laws
30
What are ethical factors? (STEEPLE)
conflict between growth/profit and social/environmental responsibilities
31
Cash flow for stars
slightly positive or 0, since there is high growth
32
Cash flow for cash cows
positive - the highest
33
What are cash cows?
high market share + low market growth successful products in mature markets high sales revenue established customer base high customer loyalty less money needed for marketing and R&D promotion likely to focus on replacement products and maintaining loyalty
34
What are dogs?
low market share + low market growth end of PLC, or niche products in low-growth markets may still be useful if cash flow is positive
35
What are stars?
high market share + high market growth increasing revenues requires significant investment to sustain growth marketing focus on attracting new customers + establishing a brand image may have a negative cash flow due to expenses in operations growth and sales
36
strategies for stars
continued investment to maintain market share, hoping it turns into a cash cow
37
strategies for dogs
if it is still useful, keep it, if there is a positive cash flow when it becomes useless, kill it not worth any further investment
38
strategies for problem childs
has potential - if money is available, invest it if there is not much potential/funds, sell it
39
strategies for cash cows
milk it! extension strategies if possible less money is needed for marketing. Promotion focused on replacement products and maintaining loyalty.
40
what are cash cows?
High market share + Low market growth successful products in mature markets high sales revenue from an established customer base customer loyalty is high
41
what are problem children?
low market share + high growth markets - often recently launched in response to competitors revenue - likely to have a negative cash flow due to necessary investment
42
what are dogs?
low market share + low growth markets - at the end of their product life cycle - or niche products competing in mature low-growth markets
43
what are stars?
high market share + growing markets - Revenues increasing - requires significant investment to sustain growth - Marketing will focus on attracting new customers + establishing a brand image - Profitability will depend on how much is reinvested in growth - spending heavily to keep expanding their operations and sales - possible for a star to have a negative cash flow
44
uses of the BCG matrix
- consider different strategies for different products - identify which products have potential - guide some investment decisions
45
limitations of the BCG matrix
must be used with other tools useless with unclear data on market share/growth - becomes subjective does not take external factors into account
46
Uses of Porter's generic strategies
- helps businesses consider how to respond to their external competitive environment - help find a competitive advantage
47
What is cost leadership
- cheapest production in the market - for markets with standardised products and less opportunity to differentiate through product quality, branding or promotion
48
What is differentiation
- a business is able to make its product better or different from competitors - identify the USP to make the product the best in the industry on that point - successful business should sell more products and could even charge a premium price - profits may also increase, but only if the business keeps the production/promotion costs under control
49
What is cost focus in a niche market
- business becomes the low-cost producer in a niche market - usually a product that is relatively basic, perhaps a lower-cost copy of a popular and higher-priced product
50
What is differentiation focus in a niche market
- business is producing a specialised, or differentiated, product for a niche market - eg very high quality, exclusive or a special characteristic that the niche market wants - business must understand the needs and wants of the niche market very well - business charges premium prices to increase revenues and compensate for the small market size
51
What happens when a business is stuck in the middle in Porter's generic strategies
- not differentiated enough to convince consumers to buy its product/high prices compared to competitors - low profits or losses
52
What is linear regression analysis and its use
a mathematical way to sort out the possible factors that might impact future sales, or other elements of a business
53
What do regression models do
describe the relationship between two variables by fitting a line of best fit
54
uses of simple linear regression
analyse how effective the marketing strategies of some businesses have been allows businesses to estimate how a dependent variable changes as the independent variable changes
55
Benefits of a scatter diagram plot (linear regression)
easy to plot show non-linear patterns with ease easy to observe and interpret the pattern maximum and minimum values are easily determined
56
Limitations of a scatter diagram plot (linear regression)
cannot give you the exact extent of correlation cannot take more than two variables into account only depicts quantitative data
57
Uses of time series in linear regression
- can know the trend of the sales, rising or falling over time - understanding any seasonal fluctuations - business can pay attention to any cyclical fluctuations

AA IB Business HL (7 decks)

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