Flashcards
3.8.2: Strategic positioning: choosing how to compete
Cards in this deck (12)
- 1Strategic Positioning:how a business is perceived by customers compared with similar businesses in the market
- 2Two Models To Analyse Strategic Position/Future Strategies:-Porters generic strategies
-Bowman's strategic clock - 3Porter's Generic Strategies:model gives firms strategic options based on the markets they operate in and the strategic advantage they offer
*Mass/Niche Market
*Focus on costs or the product itself
*Can also be stuck in the middle (like Clinton's, Nokia etc.) which is likely to lead to failure
*Also have hybrid strategies like IKEA (low price but high quality ) - 4Porter's Generic Strategies: (Cost Leadership)*to become the lowest cost producer in the industry to offer the cheapest price to customers
-increase labour productivity
-reduce variable cost
-reduce fixed costs in long term
-increase/maximise capacity utilisation
-QC/QA
-lean prodcution - 5Porter's Generic Strategies: (Differentiation)-quality of product
-branding/usp/image (marketing mix)
-innovative - 6Porter's Generic Strategies: (Cost Focus)-understanding the needs/wants of their specific market (research)
- 7Porter's Generic Strategies: (Differentiation Focus)-focus on product, place and people (expertise/knowledge making it hard for competitors to enter the market/substitute products)
e.g. Tiffany, Ferrari - 8Bowman's Strategic Clock:a model presenting 8 strategic options in terms of price and perceived value of customers
- 9Bowman's Strategic Clock: (Differentiation Strategies)-4&5 (12-2 0'clock)
differentiation (4) = may not necessarily charge premium price but ideal to increase profit margins
-focused (5) = premium prices for very high quality e.g. Sunseeker yachts more likely to be niche markets - 10Bowman's Strategic Clock: (Non-competitive strategies)-6, 7, 8 (2-7 O'clock)
-a basic product with premium price is unlikely to attract sales so customers will switch brands unless the product is in a monopoly market (sole seller of goods with no competitors) - 11Bowman's Strategic Clock: (Low-price strategies)-1 & 2 (7-9 O'clock)
-selling at a lower price than perceived value
-very low profit margins but very high volume and low customer loyalty
(not usually an ideal strategy but firms that lack USP and cater for low income/price sensitive consumers (inferior goods) can be very successful e.g. Poundland, Ryanair) - 12Bowman's Strategic Clock: (Hybrid strategies)-3 (9-12 O'clock)
-usually short-term to boost sales/create awareness (often when entering new markets)
-prices are lower than perceived value to attract interest and sales
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- A level Business Studies (3.8: Choosing strategic direction) Flashcards on 3.8.2: Strategic positioning: choosing how to compete, created by Ashleigh-Jade Jones on 06/06/2017.
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- Ashleigh-Jade Jones
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