unit 8

Question 1

what’s ansoff matrix

Answer 1

a marketing planning model that helps a business determine its product and market strategy

Question 2

what does ansoff matrix axis consist of

Answer 2

• new markets
• existing markets
• existing products
• new products

Question 3

what does market penetration

Answer 3

a growth strategy where a business aims to sell existing products into existing markets

Question 4

examples of mark penetration strategies

Answer 4

• aldi, rapid organic growth in the uk
  targeting same customer base with
  new stores
• dominos, use e-commerce to
  encourage buy pizza

Question 5

market penetration evaluation

Answer 5

• firms focuses on markets and
  products it knows well
• can exploit insights on what
  customers want
• unlikely to need significant new
  market research
• but will the strategy allow the
  business to achieve its growth
  objectives

Question 6

what product development

Answer 6

growth strategy where a business aims to introduce new products into existing markets

Question 7

evaluating product development

Answer 7

• strategy that often plays to strength of
  an established business
• strong emphasis on effective market
  research and successful innovation
• great way of exploiting the existing
  customer base
• being first to market us usually
  important

Question 8

what is market development

Answer 8

a growth stratgey where the business seeks to sell its existing products into new markets

Question 9

approaches to market development

Answer 9

• new geographical markets
• new distribution channels (e-
  commerce)
• different pricing policies to attract
  new customers in different segments

Question 10

example of market development

Answer 10

Starbucks expansions into china

Question 11

evaluating market development

Answer 11

• logical strategy where existing
  markets are saturated or in decline
• often more risky than product
  development
• existing products may not suit new
  markets

Question 12

diversification definition

Answer 12

growth strategy where a business markets new product in new markets

Question 13

evaluating diversification

Answer 13

• no direct experience of the product or
  the market
• few economic of scale
• however it successful overall risk of
  the businesses spread

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Question 14

challenge for facing business strategy

Answer 14

find a way of achieving a sustainable competitive advantage over the other competing products and firms in a market

Question 15

what is porters suggested approach to strategic positioning (2)

Answer 15

differentiation and low costs effective way for firms to gain competitive advantage

Question 16

what is competitive advantage

Answer 16

advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benifits and service that justifies higher prices

Question 17

what is low cost

Answer 17

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

Question 18

why is low cost a source of competitive advantage

Answer 18

cost leadership:
-if selling prices are broadly similar, the lowest-cost operator will enjoy the highest profits
-lowest-cost operator can also offer the lowest prices (gain market share)

suitable markets for this strategy
-standard product
-little product differentiation
-branding relatively unimportant

Question 19

likely features of a low cost operators

Answer 19

• high levels of productivity + capacity
  utilisation
• large - economies of scale
• use bargaining power to negotiate
  lowest prices from suppliers
• lean production methods and culture
• access to widest and most important
  distribution channel

Question 20

strategy of focus and differentiation

Answer 20

with a differentiation strategy, aims to offer, a product that is directly different from the competition, with the customer valuing that differentiation

Question 21

ways for a business to achieve differentiation

Answer 21

• superior product quality
• branding
• wide distribution
• sustained promotions

Question 22

what’s stuck in the middle (porters)

Answer 22

where a firm has no clear strategy e.g. Morrisons isn’t cheap or expensive