unit 8

Question 1

whats a business strategy

Answer 1

refers to how the objectives will be achieved, firms may set corporate as well as functional strategies

Question 2

what is ansoffs matrix

Answer 2

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

Question 3

what do the ansoff matrix axis consist off

Answer 3

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

Question 4

what’s market penetration

Answer 4

a growth where a business aims to sell existing products into existing market

Question 5

examples of market penetration strategies

Answer 5

ALDI - rapid organic growth in the UK targeting the same customer base with new stores

Question 6

market penetration evaluation

Answer 6

• business focuses in markets and products it knows well
• can exploit insights on what customers want
• unlikely to need significant new market research

Question 7

whats product development

Answer 7

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

Question 8

product development evaluation

Answer 8

• a stratergy that often plays to the strengths of an established business
• strong emphasis on effective research
• a great way of exploiting the existing customer base
• being first to market is usually important

Question 9

approaches to market development

Answer 9

• new geographical markets
• new distribution channels
• different pricing polices to attract new customers in diffferent segments

Question 10

evaluating market development

Answer 10

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

Question 11

market development

Answer 11

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

Question 12

whats diversification

Answer 12

the growth strategy where a business markets new products in new markets

Question 13

the challange facing business strategy

Answer 13

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

Question 14

porters suggested approach to strategic positioning

Answer 14

• porter suggested two overall business strategies that could be followed in order to gain competitive advantage
• porter argued that differentiation and low cost are effective strategies for firms to gain competitive advantage

Question 15

what is a competitive advantage

Answer 15

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

Question 16

low cost strategy

Answer 16

with this strategy 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

Question 17

why low cost is a source of competitive advantage

Answer 17

why is cost leadership important
- if selling prices are broadly similar, the lowest cost operator will enjoy the highest profits
- lowest cost operator can also offer the lowest prices

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

Question 18

likely features of a low cost operators

Answer 18

• high levels of productivity and efficiency and capacity utilisation
• large, benefitting from economies of scale
• use bargaining power to negotiate lowest prices from suppliers
• lean production methods and culture
• access to the widest and most important distribution channels

Question 19

strategy of focus and differentiation

Answer 19

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

Question 20

ways for a business to achieve differentiation

Answer 20

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

Question 21

whats stuck in the middle

Answer 21

where firm has no clear stratergy eg morssions isn’t cheap or expensive