Business A level

Ansoffs Matrix

A tool used for businesses with a growth objective in order to identify the appropriate cooperate strategy. Considers 4 elements witch are broken down into 2 categories. The Market and product.

Market Penetration

Selling more products to existing customers

Product Penetration

Selling existing Products to new customers

Market development

Involves finding and taking advantage of new market opportunities for existing products

Product Development

Involves selling new and improved products to existing customers

Diversification

Involves targeting new customers with new or redeveloped products

Porters strategic Matrix

A method of identifying a range of cooperate strategies a business might take on and helping the business choose a strategy based on Competitive edge and what type of market the business operates in.

Cost leadership

This is when a busienss aims to be the most cost competive business in a market.

Differentiation

This is when a business aims to stand out within a market in comparison to competitors

Portfolio Analysis

Involves a business carrying out a detailed evaluation of its full range of products in order for the Appropriate strategies to be identified and carried out

The Boston Matrix

A Portfolio analysis that considers the amount of market share a product has and the rate of growth a product experiences within the market.

Market research

the process of systematically gathering data from consumers to help businesses make informed decision.

Market

A place where buyers and sellers can meet

To identify, anticipate and satisfy customer needs in return for profit.

the aim of marketing

Economies of scale

The fall in average costs as output of product rises.

Sales Volume

Is the number of product sold in a business.

Sales revenue

Price x quantity sold

Market share

the amount of total sales a product/service has compared to the total market

Adding Value

The process by which firms increase the price that the consumer is willing to pay

Brand

A name, image or logo which helps a businesses products/services stand out from its competitors.

Dynamic Market

A market that is experiencing rapid or continuous change

Elasticity of demand

The effect that price change will have on demand of a product

Inelastic Demand

Demand is still high even when raising prices

Elastic Demand

Demand is way lower if you increase prices

Variable Costs

Are costs for a company that are needed to run the business, they increase as the business increases in size.

Market Segments

Groups of consumers who share similar characteristics

Mass Markets

occurs when businesses sell the products to a broad market segment

Niche Market

Occurs when businesses sell there products to a narrow market segment

Monopoly Power

A large business witch dominates a market

Online Retailing

Involves selling products via the internet

The process of gathering information directly from consumers

Primary Market research

Customer tastes , demographics, competition and legislation.

How markets change

Enables more customers ,longer trader hours, lowers fixed variable costs, helps with primary market research

How can online retailing help a business

High costs, lack of customer service, high competition

Why is online retailing bad for a business

Product Innovation

Involves the adaptation or improvement of existing products

Process Innovation

Involves the adaptation or improvement of existing processes within a business

Just in time stock control

Producing and ordering goods when needed reducing waste or extra inventory

Market Growth

The measurement of change within the entire market, expressed as a percentage

Increasing population, Increasing Incomes, changing customer taste and preferences

Factors that cause Market growth

Flexible Business structure

A business structure that allows a business to change and adapt when needed

Innovate, meet customer demand, flexible business structures

Strategies to adapt to change in a dynamic market

First mover advantage

A competitive edge gained by being the first business to introduce a product/service

Profit

The money left over after costs have been deducted

Raising prices, reducing variable costs, reducing other expenses

Ways to improve Profitability

Internal factors

The human and capital resources avialiable to a business

External factors

The political and economical state of a country that a business operates in

Cooperate strategy

This is when a business assess the Internal and External factors of a firm and use these factors to identify the best strategy to implement in order to gain a competitive edge

Customer Profile

A businesses description of an ideal customers charachteristics

Direct Compeition

Businesses selling similar products in the same market

Indirect compeition

Businesses selling different products in the same market

Flexible business structure, meet customer demand, innovate and invest

Strategies for adapting to change

Disposable Income

Money that customers have left over after paying taxes

Businesses offering lower prices, better quality, better customer service.

How competition benefits Customers

Businesses being incentivised to offer lower prices, innovate and improve quality

How increased competition affects the market

Businesses being less incentivise to lower prices, innovate or improve quality

How can the absence of competition affect the market

Product testing, Product research,Product Focus

Tools of Product orientation

Market testing, Market research, Customer focus

Tools of Market orientation

Product Orientation

An approach used by investors who research, test and produce a product before any Market research has taken place

Market Orientation

Is an approach where businesses focus on the needs and wants of customers and use this data in order to develop products

Reduce risk, understand consumer behaviour and potential demand for a product

Ways Market research will help with a business

Uncertainty

Events within a business witch can not be prepared for

Risk

Events within a business witch can be anticipated and prepared for

Risk management

The process of anticipating and preparing for potential risks within a business

Primary research Methods

Surveys, Interviews, Obeservations, Focus Groups

Information is more tailored to a businesses needs, unavailable to competitors and more up to date.

Advantages of Primary Research

May be Costly and time consuming, also sample sizes may not accuratley represent customers.

Disadvantages of Primary Research

The process of gathering and analysing information that already exists.

Secondary research

Less time consuming, lower costs.

Advantages of Secondary research

Information may be factually wrong or out of date

Disadvantages of Secondary Research

Increased Loyalty, Less expensive and wasteful than marketing to wide market segements,

Advantages of Market segmentation

Segment may be to small and unprofitable for a business to deal with, requires more detailed research witch may be costly.

Disadvantages of Market segmentation

Market Positioning

The process of a business deciding where they want to position a new product/service in the market through Price, Quality branding and customer perception.

Market Mapping

A 2 dimensional diagram that shows the attributes or characters of a product in comparison to its competitors, only 2 criterias can be chosen

Market Niche

A gap in the Market

can help a business understand where there product is positioned amongst competitors, and can help identify market gaps

Advantages of Market Mapping

This method may require primary market research witch may be expensive. only 2 criteria can be chosen witch may be too simplistic.

Disadvantages of Market Mapping

When a businesses product is different to compeitors

Distinctive

When a business is able to prevent competitors from copying there product/service

Defensible

Cost leadership , innovation, differentiation, market segementation

Sources of competitive advantage

Product Differentiation

The process of businesses distinguishing there products from that of competitors

Benefits of Product Differentiation

can help a business increase demand, increase prices and brand loyalty

W

Helps a business develop a Competitive advantage and Unique selling point (USP) within the market

The difference between the Price charged to customers and the costs required to produce the product/service

Adding value (Other def)