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business > topic 8 (strategic direction) > Flashcards

topic 8 (strategic direction) Flashcards

1
Q

Ansoff’s matrix

A

market penetration, product devlopment, market devlopment and diverfication

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2
Q

market penertration is

A

same market, same product

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3
Q

how to achieve market penertration

A
  • Reduce prices
  • Brand repositioning
  • Promotion
  • Loyalty schemes
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4
Q

evaluation of market penertration

A
  • Least risky as business has experience
  • Unlikely to need significant new market research
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5
Q

market development is

A

new market, same market

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6
Q

methods of market development

A
  • Exploring foreign markets
  • Using e-commerce
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7
Q

Evaluation market development

A
  • Logical strategy
  • Often more risky then product development
  • Existing products may not suit new market
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8
Q

product development is

A

same market , new product

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9
Q

evaluation of product delvelopment

A
  • Whether there is spare capacity
  • Being first to the market is important
  • A good way of exploiting existing customer base
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10
Q

diversification is

A

new prodcut new market

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11
Q

Evaluation of diversification

A
  • Risky strategy
  • No direct experience of the product or market
  • Few economies of scale (initially)
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12
Q

Approaches to diversification could be

A
  • Innovation: develop new solutions
  • Acquire an existing business in the market
  • Extend an existing brand into the new market
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13
Q

poters geneic strategies

A

Finding a way of achieving a sustainable competitive advantage over the other competing products and firms in the market. this can be achieved through one of 3 generic strategies
- cost leadership
- differentiation
- focus

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14
Q

a low cost strategy is

A

a strategy where the objective is to become the lowest-cost operator. This typically involves production on a large scale which enables the business to exploit economies of scale

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15
Q

why is low cost a competitive advantage

A
  • Leadership cost
    Lowest-cost operator can also offer the lowest prices
  • Sustainable markets
    Standard products
    Little product differentiation
    Branding relatively unimportant
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16
Q

a strategy of differntation aims to

A

offer a product that is distinctively different from the competition, with the customer valuing that differentiation

17
Q

ways to achive differentation are

A
  • Superior product quality
  • Branding
  • Wide distribution
  • Sustained promotion
18
Q

bowman’s strategic clock

A
  1. low price and low added value
  2. low price
  3. hybrid
  4. differentiation
  5. focused differentiation
  6. risky high margins
  7. monopoly pricing
  8. loss of market share
19
Q

bowman’s strategic clock (1)

A

low price low added value
not very competitive position
very little precived value
bargain basement strategy

20
Q

bowman’s strategic clock (2)

A

low price
cost minimization stratagem required to be successful
intense competition
low profit margins

21
Q

bowman’s strategic clock (3)

A

hybrid
- involves some element of low price
- also product differentiation
- aim to convince consumers there is good added value price

22
Q

bowman’s strategic clock (4)

A

differentiation
- offer highest level of precived added value
- branding is key
- as well as product quality

23
Q

bowman’s strategic clock (5)

A

focused differentiation
- aims to position a product at highest price levels
- positioning strategy adopted by luxury brands
- aim to achieve premium prices by highly targeted segmentation, promotion and distribution
- can lead to high profit margins

24
Q

bowman’s strategic clock(6)

A

risky high margins
- high risk strategy
- sets high prices without offering anything extra in terms of perceived value
- other than in the short-term this is an uncompetitive strategy

25
Q

bowman’s strategic clock(7)

A

monopoly pricing
- only one business offering the product
- doesn’t need to care bout value perceived
- tightly regulated

26
Q

bowman’s strategic clock (8)

A

loss of market share
- position is recipe for disaster in any competitive market
- middle range or standard price for a product with low perceived value
- unlikely to win over customers as will be much better options

business (12 decks)

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