choosing the strategic position Flashcards
(19 cards)
Q: What is strategic direction?
A: It refers to the decisions a business makes about which markets to compete in and which products to offer.
Q: What is the Ansoff Matrix used for?
A: To help businesses decide their product and market growth strategy.
Q: What are the four strategies in the Ansoff Matrix?
market penetration, product development, market development, differentiation
Q: When is market penetration a suitable strategy?
A: When the market is growing or the business wants to increase its market share.
Q: What is market development?
A: Selling existing products in new markets (e.g. new regions or demographic groups).
Q: What is product development?
A: Introducing new products into existing markets.
Q: What is diversification?
A: Introducing new products into new markets—often the riskiest strategy.
Q: Give two factors influencing which strategic direction to choose.
business resources/capabilities
market conditions
Q: What is the value of the Ansoff Matrix in strategic decision-making?
A: It helps assess risk and clarify growth options.
Q: What is strategic positioning?
A: How a business chooses to compete in terms of price and benefits offered to customers.
Q: What are the three generic strategies in Porter’s model?
cost leadership, differentiation and focus
Q: What is cost leadership?
A: Competing by being the lowest cost producer in the market.
Q: What is differentiation?
A: Competing by offering a unique product with added value.
Q: What is a focus strategy?
A: Targeting a niche market with either cost or differentiation.
Q: Give two influences on a business’s choice of positioning strategy.
A: Resources and capabilities; market structure and competition.
Q: What is a competitive advantage?
A: A feature that allows a business to outperform rivals.
Q: Give two benefits of having a competitive advantage.
A: Higher profit margins and stronger customer loyalty.
Q: Why is it difficult to maintain a competitive advantage?
changes in technology and consumer preferences
Q: What is the danger of being “stuck in the middle” (according to Porter)?
A: The business fails to achieve either low cost or differentiation effectively and may lose out to both types of competitors.
