8 - Choosing Strategic Direction🚀

Question 1

The Ansoff Matrix

What is it called if it is an existing product in an existing market?

Answer 1

Market penetration

Question 2

The Ansoff Matrix

What is it called if it is an existing product in a new market?

Answer 2

Market development

Question 3

The Ansoff Matrix

What is it called if it is a new product in an existing market?

Answer 3

Product development

Question 4

The Ansoff Matrix

What is it called if it is a new product in a new market?

Answer 4

Diversification

Question 5

The Ansoff Matrix

What is the benefit for a business who is in market penetration?

Answer 5

Leads to increasing market share which will drive out competition

Question 6

The Ansoff Matrix

What is the benefit for a business who is in product development?

Answer 6

They are the first to market and understand customer needs

Question 7

The Ansoff Matrix

What is the benefit for a business who is in market development?

Answer 7

Selling via new channels to a new demographic leads to a change in pricing strategies

Question 8

The Ansoff Matrix

What is the benefit for a business who is in diversification?

Answer 8

Can increase product portfolio but is the most risky

Question 9

Porter’s strategies

What is the criteria for cost leadership?

Answer 9

Low cost, mass market

Question 10

Porter’s strategies

What is the criteria for differentiation leadership?

Answer 10

Premium price, mass market

Question 11

Porter’s strategies

What is the criteria for cost focus?

Answer 11

Low cost, niche market

Question 12

Porter’s strategies

What is the criteria for differentiation focus?

Answer 12

Premium price, niche market

Question 13

Porter’s strategies

What does cost leadership involve?

Answer 13

• high productivity
• high capacity utilisation
• bargaining power
• lean production

Question 14

Porter’s strategies

What does differentiation leadership involve?

Answer 14

• high product quality
• strong branding
• industry-wide distribution
• consistent promotions

Question 15

Porter’s strategies

Give an example of a cost leadership business

Answer 15

Aldi, Ryanair, Poundland

Question 16

Porter’s strategies

Give an example of a differentiation leadership business

Answer 16

Apple, Nike

Question 17

Porter’s strategies

What does cost focus involve?

Answer 17

• basic products
• acceptable to customers
• small

Question 18

Porter’s strategies

Give an example of a cost focus business

Answer 18

local poundshop

Question 19

Porter’s strategies

What does differentiation focus involve?

Answer 19

• very niche
• need to meet needs and wants of customer

Question 20

Porter’s strategies

Give an example of a differentiation focus business?

Answer 20

Ferrari

Question 21

Bowman’s Strategic Clock

What are the axis?

Answer 21

Perceived value to the consumer, price

Question 22

Bowman’s Strategic Clock

What is strategy 1?

Answer 22

Low price & low added value

Question 23

Bowman’s Strategic Clock

What is strategy 2?

Answer 23

low price

Question 24

Bowman’s Strategic Clock

What is strategy 3?

Answer 24

Hybrid

Question 25

Bowman's Strategic Clock What is strategy 4?

Answer 25

Differentiation

Question 26

Bowman's Strategic Clock What is strategy 5?

Answer 26

Focused differentiation

Question 27

Bowman's Strategic Clock What is strategy 6?

Answer 27

Risky high margins

Question 28

Bowman's Strategic Clock What is strategy 7?

Answer 28

Monopoly pricing

Question 29

Bowman's Strategic Clock What is strategy 8?

Answer 29

Loss of market share

Question 30

Bowman's Strategic Clock What does low price and low value added 1 mean?

Answer 30

Not competitive position - only way to stay competitive is to market as "cheap as chips"

Question 31

Bowman's Strategic Clock What does low price 2 mean?

Answer 31

Cost minimisation - profits from high volume sold

Question 32

Bowman's Strategic Clock What does hybrid 3 mean?

Answer 32

Product differentiation - persuades consumers that there is good added value and a reasonable price

Question 33

Bowman's Strategic Clock What does differentiation 4 mean?

Answer 33

Highest level of perceived added value - high quality combined with strong brand loyalty

Question 34

Bowman's Strategic Clock What does focused differentiation 5 mean?

Answer 34

Highest price levels and high perceived value = luxury brands

Question 35

Bowman's Strategic Clock What does risky high margins 6 mean?

Answer 35

High prices without offering anything extra in terms of perceived value

Question 36

Bowman's Strategic Clock What does monopoly pricing 7 mean?

Answer 36

Only one business offering the product so no choice for customers

Question 37

Bowman's Strategic Clock What does loss of market share mean?

Answer 37

Setting middle-range price for product with low perceived value

Question 38

Bowman's Strategic Clock Which strategies should a business avoid because price is greater than perceived value?

Answer 38

6, 7 and 8