Topic 5: Business stategies

Question 1

Integration strategies?

Answer 1

Forward vertical
- Business takes over its distrubuters

Backward vertical
- Business takes over its supliers

Horizontal
- Business takes over other businesses in its industry

Question 2

Defensive strategies?

Answer 2

Disventure
- Business sells some assets that is no longer profitable

Retrenchment
- Termination of employment contracts for operational reasons

Liquidation
- All business assets are sold to pay creditors

Question 3

Intensive strategies?

Answer 3

Market penetration
- New products penetrate a existing market at a low cost

Market development
- Sell existing products in new markets

Product development
-New products in current markets

Question 4

Diversification stratgies?

Answer 4

Concentric diversification
- New product related to existing product which will appeal to existing coustomers

Horisontal diversification
- New products not realted to existing products but may appeal to existing coustomers

Conglomerate diversivication
- New products to new markets

Question 5

Advantages of intensive strategies?

Answer 5

• Increase in sales
• Improved service delivery
• Remove existing competitors and dominate market prices

Question 6

Advantages of diversification strategies?

Answer 6

• Increased sales and bussiness growth
• Improve business image
• Reduce risk of relying on one product