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business strategy
a long term plan which will give the firm an advantage in the competitive market place & fulfil stakeholder expectations
Ansoff's matrix (1957)
a tool to help businesses achieve growth
market penetration
achieve growth in existing markets with existing products
how can market penetration be achieved
brand loyalty, encouragement to use the products more,
product development
marketing new or modified product in existing markets
market development
marketing existing products in new markets
how to develop markets
diff countries have diff tastes and preferences
diversification
new products developed for new markets
porters strategies matrix (1980)
to identify the sources of competitive advantage that a business might achieve in a market
cost leadership
striving to be the lowest cost provider in a market
differentiation
businesses operating in a mass market but adopting a unique position instead of lower cost position
differentiation is achieved by
quality, design, brand identity, customer service
differentiation advantages
able to charge a premium price (USP)
differentiation disadvantages
hard to guarantee that the rewards will justify additional costs
Differentiation focus
Pursuing different strategies within a focussed market e.g. Ferrari
Focus advantages
Locussing onnarrowsegment → understands customers well
Focus disadvantage
Market = v. Small → low bargaining power with suppliers
Competitive advantage
set of unique features → company perceived by customers robe superior
Distinctive capabilities
Form of competitive advantage → hard for competitors understand / imitate
Kay's distinctive capabilities framework (1995)
Architecture → connections & relationships
reputation → brand image
innovation → new products / production process
portfolio analysis
categorising all the products and services of a firm → deciding where it fits in a strategic plan
