Lecture 3 (Farmanara)

Question 1

Ansoff growth matrix

Answer 1

1. Market Penetration (Coke for Christmas) (Existing market , Existingproduct )
2. Market development ( Coke zero/diet)(New market , existing product)
3. Product development (Coke Vanilla) (Existing market, new product )
4. Diversification (T-shirt) (new, new)

Question 2

Boston-Consulting-Group-Matrix

Answer 2

The Boston Consulting group’s product portfolio matrix (BCG matrix) is designed to help with

• Long-term strategic planning
• Defining growth opportunities
• Potential

1. Dogs: These are products with low growth or market share. (Diet coke)
2. Question marks: Products in high growth markets with low market share.(Fanta)
3. Stars: Products in high growth markets with high market share. ( water Kinley)
4. Cash cows: Products in low growth markets with a high market share (Coca-Cola)

Question 3

Types of SBU (strategic business unit) portfolio changes

Answer 3

1. External development (Mergers &Acquisitions) (Generation of new strategic business units)
   - Large economies of scale
   - Economies of scope
   - Negotiating power
   - Create more sales
   - More resources
   Risks:
   - Acquisition price
   - Integration (structures, processes)
2. Internal (organic) development (Generation of new strategic business units by organic growth)
   - Gradual entry particularly in dynamic markets
   - Limit risk exposure
   Risks:
   - Late activity in the market
   - Loss of entire investment

Question 4

Related diversification strategies

Answer 4

Horizontal (FaceBook/Instagram)
•Synergies (scale economies)
•Complementary competencies or resources

Vertical (Producer buys supplier, or supplier buys producer)
• Risk of reduction
• Security
• Better negotiation position

Question 5

Unrelated diversification strategies

Answer 5

Conglomerate (Producer buys producer)

• Spread a risk( one on the crisis, one is ok)
• To secure power
• Empire building