3.8 Choosing areas of competition

Question 1

Give one example of Market Penetration

Answer 1

1) ALDI
2) DOMINOS (With e-commerce)

Question 2

Give one example of Market development

Answer 2

1)Tosco’s failed attempt to expand to the USA with its fresh and easy brand
2) Johnsons baby shampoo getting usage by adults as well as children (HYPOTHETICAL)
3)Starbucks expansion to China

Question 3

Give one example of Product Development

Answer 3

1) Brand extension such as coca cola life
2) technological innovations such as Tesco’s Clubcard innovation in 1995

Question 4

Give an example of Diversification

Answer 4

ITV £175M acquisition of Friends Reunited which failed and had to be sold for £25M

Question 5

An example of diversification that brought Apple synergy

Answer 5

Apple AirPods being developed and are a source of synergy with Apple

Question 6

Risks that geographic diversification can bring

Answer 6

More political risk
More economic risk

Question 7

What countries did Procter & Gamble diversify into? the business that owns pampers.

Answer 7

Venezuela & Greece
Providing political and economic risk

Question 8

Name 3 factors impacting the choice of strategic decision

Answer 8

1) Level of risk involved
2) Shareholder support
3) Existing brand image
4) Employee reaction, labor turnover
5) Availability of staff
6) Cost of pursuing strategies
7) ROCE?
8) CSR and ethical factors
9) Government intervention, competition law