unit 8 Flashcards
what’s ansoff matrix
a marketing planning model that helps a business determine its product and market strategy
what does ansoff matrix axis consist of
- new markets
- existing markets
- existing products
- new products
what does market penetration
a growth strategy where a business aims to sell existing products into existing markets
examples of mark penetration strategies
- aldi, rapid organic growth in the uk
targeting same customer base with
new stores - dominos, use e-commerce to
encourage buy pizza
market penetration evaluation
- 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
what product development
growth strategy where a business aims to introduce new products into existing markets
evaluating product development
- 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
what is market development
a growth stratgey where the business seeks to sell its existing products into new markets
approaches to market development
- new geographical markets
- new distribution channels (e-
commerce) - different pricing policies to attract
new customers in different segments
example of market development
Starbucks expansions into china
evaluating market development
- logical strategy where existing
markets are saturated or in decline - often more risky than product
development - existing products may not suit new
markets
diversification definition
growth strategy where a business markets new product in new markets
evaluating diversification
- no direct experience of the product or
the market - few economic of scale
- however it successful overall risk of
the businesses spread
-
challenge for facing business strategy
find a way of achieving a sustainable competitive advantage over the other competing products and firms in a market
what is porters suggested approach to strategic positioning (2)
differentiation and low costs effective way for firms to gain competitive advantage
what is competitive advantage
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
what is low cost
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
why is low cost a source of competitive advantage
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
likely features of a low cost operators
- 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
strategy of focus and differentiation
with a differentiation strategy, aims to offer, a product that is directly different from the competition, with the customer valuing that differentiation
ways for a business to achieve differentiation
- superior product quality
- branding
- wide distribution
- sustained promotions
what’s stuck in the middle (porters)
where a firm has no clear strategy e.g. Morrisons isn’t cheap or expensive
