UNIT 8

Question 1

define strategic direction

Answer 1

strategic direction involves a business choosing which markets to operate in and which products to provide

Question 2

who created the matrix that focussed on types of strategies for growth

Answer 2

ansoff

Question 3

top left strategy ansoffs matrix

Answer 3

market penetration
- existing market, existing product
- least risky
- doing same thing but more
* change prices + branding

Question 4

bottom left strategy ansoffs matrix

Answer 4

market development
- existing product in new market
- possibly to emerging markets and different countries
- takeover firm that operates in new market

Question 5

top right ansoff matrix

Answer 5

product development
- new product in existing market
- heavy R+D

Question 6

bottom right ansoff matrix

Answer 6

diversification
- most risky
- new product, new market
- need financial power

Question 7

2 strengths 2 weakness of mp

Answer 7

• low risk
• capture market share
• limited growth potential
• vulnerable it not innovative

Question 8

2 strengths 2 weakness of pd

Answer 8

• familiar w customers
• responds to customers needs
• timely
• potentially costly

Question 9

2 strengths 2 weakness of md

Answer 9

• potential for large growth
• no need for expensive product development
• limited understanding
• competing against established companies

Question 10

2 strengths 2 weakness of diversification

Answer 10

• reduce dependance on one income
• create a competitive advantage
• high risk due to no expertise in market

Question 11

whats ansoffs matrix

Answer 11

ansoffs matrix is a marketing planning tool which suggests that a business has the potential to grow. the output is a series of suggested strategies

Question 12

name porters 3 strategies

Answer 12

differentiation, focus and cost leadership

Question 13

whats cost leadership

Answer 13

• priorities economies of scale through bulk buying to increase buyer power.
  using unique technology to be able to lower unit costs

Question 14

3 adv and dis of cost leadership

Answer 14

• increases profit margins as costs are low
• can maintain selling price unlike competitors
• can lower price to gain market share
• most businesses dont compete on cost

Question 15

whats differentiation

Answer 15

differentiation is having a specific USP within a business, whether thats: quality, service, speed of delievery etc. this allows you to charge premium prices

Question 16

advantages and disadvantages of differentiation

Answer 16

• develops brand, helps stand out
• adds value to charge premium
  however
  other businesses may copy strategy

Question 17

advantages and disadvantages of differentiation

Answer 17

• develops brand, helps stand out
• adds value to charge premium
  however
  other businesses may copy strategy

Question 18

whats focus

Answer 18

the focus element implements their products/ services on a specific/ niche market that targets a market in particular

Question 19

advantages and disadvantages of focus

Answer 19

• easier to target a narrow segment
• better understanding of niche customers
• needs loyalty- every customer counta

Question 20

whats a competitive advantage

Answer 20

a sustainable advantage a business has over competitors, enabling it to succeed

Question 21

3 ways a competitive advantage can be completed

Answer 21

innovation
architecture
reputation