topic 8- strategic direction

Question 1

what is a strategy ?

Answer 1

medium or long term plan for achieving a business objectives

Question 2

what is strategic direction ?

Answer 2

decisions made regarding the market that is operates in and the products that it offers

Question 3

what is Ansoff Matrix for ?

Answer 3

a marketing planning model that helps determine its products and market strategies for a business

Question 4

what are the 4 strategies of Ansoff Matrix ?

Answer 4

• market penetration
• product development
• market development
• diversification

Question 5

what are the 7 factors to consider when deciding on a strategy ?

Answer 5

• expected costs
• expected return
• opportunity cost
• risk
• fit w the business and resource mix
• impact on stakeholders
• ethical issue involved

Question 6

what is market penetration ?

Answer 6

existing products
existing markets
- selling more to existing products to the same customers

Question 7

what is the aim for market penetration ?

Answer 7

increase market share

Question 8

how do you increase market share in market penetration ?

Answer 8

• selling most
• sales promotion
• advertising
• extension strategies

Question 9

why does market penetration have the least amount of risk ?

Answer 9

no research is needed to be done for products or markets so saves the costs

Question 10

what are 3 strengths of market penetration ?

Answer 10

• focus on products and markets that they know
• know what consumers want
• don’t need significant market research

Question 11

what are 2 weaknesses of market penetration ?

Answer 11

• but will it allow the business to achieve a growth objective
• difficult in saturated markets

Question 12

what is product development ?

Answer 12

new products
existing markets

Question 13

why is product development medium risk ?

Answer 13

• as it same market so no market research
  but
• new products so need research and time spending developing so costs will rise

Question 14

what does selling new products do ?

Answer 14

• brand loyalty
• market research
• extension strategies as new features and updates
• high cash flow mean can finance the research and development

Question 15

what can make it able for product development to use lean design ?

Answer 15

if an efficient and effective research team

Question 16

what is a lean design for a product ?

Answer 16

you get the product first to the market

Question 17

what are 3 strengths for product development ?

Answer 17

• helps with product life cycle and growth
• know about existing markets
• can strengthen and establish the brand

Question 18

what is the weakness for product development ?

Answer 18

market research needs to be effective so it is expensive

Question 19

what is market development ?

Answer 19

existing products
new markets
- new geographical markets and new distribution channels

Question 20

why is market development got a medium risk ?

Answer 20

• same products so avoid the need for research and development
• different market so need to do market research so it increases costs and may not work

Question 21

what 3 things can be used to help in market development ?

Answer 21

• core competency is the product
• advertising to grow the remark
• multi channel distributions

Question 22

why is the core competency being the product for the market development strategy beneficial ?

Answer 22

as it can be better positioned business so can understand how to use that product in a different market as understand the product

Question 23

why is using multi channel distribution useful in the market development strategy ?

Answer 23

most cost effective way to penetrate a new market

Question 24

what is the 1 advantage of market development ?

Answer 24

logical strategy where existing markets are saturated or in decline

Question 25

what are the 2 weaknesses of market development ?

Answer 25

- more risks than product development as expansion international markets - existing products may not suit new markets

Question 26

what is diversification ?

Answer 26

new products new markets

Question 27

why is diversification the most risk ?

Answer 27

new markets and products to need market research and development not products so the costs increase

Question 28

why is diversification usually thought to be used as a strategy ?

Answer 28

usually think of it as a distressed business or one that needs to change it strategy as need to increase profit or growth - as a saturated market or product is in decline and can just been used to grow

Question 29

what are the 3 strengthens for diversification ?

Answer 29

- if successful then risk is spread - extend an existing brand - innovation and research and development to use new solution

Question 30

what are 2 weaknesses of diversification ?

Answer 30

- no direct expense - fewer economic of scale

Question 31

what is strategic positioning ?

Answer 31

how a business is perceived relative to other business in the industry

Question 32

what is competitive advantage ?

Answer 32

sustainable advantage that a business has over competitors that enables it to succeed in the market

Question 33

what place does a sustainable competeive advantage do for a business ?

Answer 33

it is more likely to be above average in the industry for profitability

Question 34

what are porters 2 sources of competitive advantage ?

Answer 34

- cost leadership - differentiation

Question 35

what is cost leadership ?

Answer 35

where a business is able to produce its product at a lower costs than the competition

Question 35

what is cost leadership based by ?

Answer 35

operations

Question 35

what are the 4 areas of operations that cost leadership is based by ?

Answer 35

- economies of scale - capacity utilisation - labour productivity - lean production

Question 36

what is differentiation ?

Answer 36

where a business is able to differentiate its products from the competition such that customers perceive superior value - they aim to offer a product that is distinctively different

Question 37

what are 5 different ways to achieve differentiation ?

Answer 37

- superior product quality - branding - wide distribution - sustained promotion - innovation

Question 38

what are the 2 narrow competitive scopes ?

Answer 38

- cost focus - differentiation focus

Question 39

what is cost and differentiation focus used for ?

Answer 39

focusing on one specific segment of cost leadership or differentiation

Question 40

what is the competitive scope ?

Answer 40

the amount the market is targeted

Question 41

what are the 2 different competitive scopes ?

Answer 41

- broad - narrow

Question 42

what are the 2 broad competitive scopes ?

Answer 42

- cost leadership - differentiation

Question 43

what did porter say you shouldn't do ?

Answer 43

shouldn't be 'stuck in the middle' and that you need to choose 1 between cost leadership and differentiation

Question 44

what are 3 influences on positioning a strategy ?

Answer 44

- competition as does it want to compete head on or position itself in the market away from direct competition - external factors - strengths and competences of a business

Question 45

why is being 'stuck in the middle' bad according to porter's model ?

Answer 45

the business is therefore at risk of a fail - needs to be clear in terms of what it wants to do and how it wants to be positioned in the market

Question 46

what are 3 ways of protecting competitive advantage ?

Answer 46

- legal protection - control over resources - a particular culture

Question 47

what is repositioning ?

Answer 47

the process of altering the existing space of the brand occupies in the brain of customers

Question 48

why may a business need to repositioning themselves ?

Answer 48

internal and externa conditions change - may take time to alter