3.1.2 theories of corporate strategy Flashcards
define corporate strategy
a medium to long term plan for meeting company wide objectives
porters strategic mix
suggested three generic business strategies to get competitive advantage
cost leadership, differentiation, focus
cost leadership - porters strategic mix
making products at the lowest cost
outsourcing, lean management,
differentiation - porters strategic mix
products or service is unique and the USP adds value to the product
focus - porters strategic mix
product or service will serve a very small specific niche
high costs passed onto customers
no close substitutes
Boston matrix
marketing planning tool to help managers plan for a balanced product portfolio
cash cow, star, dog, question mark
Boston matrix - question mark
high market growth, low market share
products just launched on the market, building customer loyalty
Boston matrix - cash cow
reaching maturity of product life cycle
still have customer loyalty
Boston matrix - star
high market share, high market growth
growth phase of product life cycle
Boston matrix - dog
declining sales in declining markets
decline phase of product life cycle
product should be removed from sale
Boston matrix uses
market share is compared against large competitors
helps business analyse future opportunities or problems with products portfolios
Boston matrix limitations
market is not clearly defined in this model
high market share doesn’t always lead to high profits
high costs involved with high market share
define kays distinctive capabilities
a strength a business has that other businesses cannot easily copy
provides a competitive advantage
kays 3 distinctive capabilities
architecture - relationships with employees, suppliers, customers
reputation - through the customer experience
innovation - bringing inventions to market
strategic decisions
long term direction of business
what the business will do to meet aims and objectives
pro-active decision making
forward thinking, future planning
