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Description
Flashcards by lorna.lizzi, updated more than 1 year ago
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Created by lorna.lizzi
over 8 years ago
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| Question | Answer |
| Market penetration | Market penetration is an option that emphasises stability, at least in terms of the products or services provided or the markets served. |
| Market and product development | In a market development strategy the organisation takes its existing products and services into new markets. These may be new geographic markets, or new segments of existing markets where a firm may have identified previously unmet or unexpected customer need. Firms may have different motivations for pursuing a market development strategy |
| Market and product development example | Examples of organisations that have emphasised a corporate strategy based upon market development are provided by household products companies such as Proctor and Gamble (P&G) and Johnson & Johnson. Both operate worldwide, selling a range of products that they have spent decades developing brand awareness. |
| Competitive strategy | As we noted at the beginning of this unit, competitive strategy is about formulating a strategy that enables an organisation to compete within its industry or sector, based upon identifying sources of potential competitive advantage available to it. |
| What should Competitive strategy consider | Therefore any competitive strategy should consider: The resources and capabilities available to the organisation . The nature of the external environment in which it operates . the objectives of key stakeholders . the industry key success factors (KSFs) . the context in which the organisation operates. |
| business model frameworks | One such framework is the simple ‘who, what, how’ framework (Markides, 1999). This framework is essentially a checklist, which helps managers to quickly remind themselves: . Who is the customer? . What is the value proposition that their organisation makes to its customer? . How does the organisation deliver that value proposition? |
| Lynch's principals on business risk | Cash flow analysis – a crucial measure, as organisations can be profitable, but go bankrupt because of poor cash flow and liquidity. Strategies that offer long-term profitability may not generate cash immediately and hence may endanger the company’s existence. . Break-even analysis – an approach that estimates the amount of sales/ revenue generated that is required to cover the cost of the initial investment in the launch of the strategy. Is the resulting break-even revenue figure achievable or realistic? . Company borrowing requirements – can the strategic option be accomplished within the current financial capabilities of the organisation, or will extra borrowing be required to finance the strategy? What impact will this extra gearing have, for example, upon the share value of the organisation? Will pursuit of the strategic option leave the organisation open to hostile takeover? . |
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