Flashcards
Choosing Strategic Direction
Cards in this deck (19)
- 1Strategic directionWhere a business is heading; a long term path based on the mission objectives of the business
- 2Factors that influence the choice of market to operate in- Saturation within the market
- Research
- Size
- Growth potential
- Porter's 5 Forces
- Buying habits
- PESTLE
- Mass / Niche
- B2B or B2C - 3Factors that influence the choice of products to offer- Saturation
- Substitution products
- Boston Matrix
- USP
- Finance
- Technology
- Social - 4What is the Ansoff Matrix?It is a decision-making model for strategic planning growth that was developed by Igor Ansoff.
- 5Market Penetration- Promoting higher sales, existing products and existing market
- Boost brand loyalty and share from what they firm already had
- Modify the marketing strategies
- Lowest risk - 6Market Development- Entering a new market with an existing product.
- Exporting to new geographic locations or targeting new market segment
- Aims to increase companies sales and profit
- Risker as market is not known
- Market research will need to be gathered and accurately analysed - 7Product Development- New product within an existing market
- Main aim is to keep up with development.
- Risky as requires expenditure on research and development.
- Although know the market and customer, will not establish customer loyalty.
- Spread the risk as they are not depended on one product. - 8Diversification- New product in a new market
- Most risky direction
- Spread risk throughout business as they operate within more markets with more products
- Lack of knowledge of products and market - 9—Product life cycle
- 10What happens when a product goes into declineAt the stage of decline a firm has a firm has a few options;
- Withdrawal
- Let it decline until it no longer generates profit or contributes towards paying fixed costs and breakeven.
- Improve the products sales by using a exertion strategy - 11Possible exertion stragetgies- Reposition the brand into a niche market
- Targeting new market segments with the same product
- Updated design of the product/packaging
- Modifying ingredients
- Changes of sizes and products
- Increase usage of the product
- New advertising campaigns
- Move into foreign markets
- Create a new bran image
- Improve customer service or after-sales service - 12Boston MatrixA method of analysing the existing products in a firm's product portfolio based on the market share they have in the market and the growth in the marker in which they operate.
- 13What is strategic positioningHow the business is perceived by customers compared with similar businesses in the market.
- 14Bowman's strategic clockstrategic postion a business might take in relation to two variables.
1. Varying levels of prices charged to the customer
2. Perceived value to the customer or expected benefits gained of the good/service
Shows the potential directions based the different combinations of value and price - 15Porter's generic strategiesModel involves giving firms strategic options based on the markets they operate in and strategic advantage they offer.
To develop a sustainable competitive advantage and earn high profit must adopt one of 2 strategies, cost leadership or differentiation. - 16Hybrid StrategiesDifferentiation and low cost are not mutually exclusive. NOT ONE OR THE OTHER BUT CAN OFFER BOTH
- 17Influences on the choice of a positioning strategy- Size of market
- Saturation
- Products offered
- Costs; financial
- Budgets
- Innovation
- Current competition
- Mission objectives
- B2B or B2C
- Business cycle
- Economy
- PESTLE
- Product life cycle
- Core Competence - 18The benefits of having a competitive advantage- Higher profits
- Faster sales growth
- Higher capacity utilisation
- Surviving recessions
- Economies of scale - 19Difficulties of maintaining a competitive advantage- Firms must keep innovating to stay ahead of the competition
- New entrants
- changes in fashion/taste
- New laws/government regulation
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- A-Level A-Level Business Studies Flashcards on Choosing Strategic Direction, created by Hollie Ferris on 25/05/2017.
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- Hollie Ferris
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