STRAMA 4

Posters generic strategies

companies must choose how to compete

Cost leadership, Differentiation, Focused Cost, Focused Differentiation

Cost leadership

Be the cheapest (eg: Cebi pasific, Xiaomi, mcdo)

Differentiation

Be unique (eg: apple, starbucks)

Focused Cost

Low cost niche (eg: generic meds, budget hostels)

Focused Differentiation

Unique niche (eg: rolex, crossfit)

Ansoff Matrix (growth options)

igor ansoff created a simple framework.

It shoes the 4 main paths for growth base on 2 questions

• do we stick with current products or create a new ones

• do we serve current markets or enter new ones

1. Market Penetration

2. Market Development

3. Product Development

4. Diversification

Market Penetration

-deepen exist market (sell more of the same product to the same market)

-by promotions, disc, loyalty programs, increasing usage.

example: coca cola runs buy 1 take 1 or personalized bottles (“Share a Coke”). They’re not creating new products, just encouraging existing customers to drink more.

-the risk level is low or least risky because you know the market + product

Market Development

-new market same product (sell existing products to new customer groups or geographies)

-by expand abroad, and traget new demographics

example: jolibee entering the middle east.

-the risk level was medium (you know the product but must learn a new market)

Product Development

-new products for current markets (create new offer for ur existing customers)

-by innovating, upgrades and bundling

example: netflix by adding games to theur platform Same subscribers but now offering new content to keep them engaged.

-the risk level was medium (u know ur customers but need to succeed with new product)

Diversification

New products in new markets ( Enter a new industry with new products and a new market.)

by Acquisitions, big pivots, entering unrelated industries.

Example: ayala corp expand from real estate into renewable energy. Totally different industry, new risks, but new opportunities.

-the risk level was high (new product + new market)

Blue Ocean Strategy / Blue Ocean (Create)

moving away from bloody competition (Red Ocean) and instead creating new, peaceful waters where you sail alone.

This is about creating new, uncontested market space.

Instead of fighting competitors, you make competition irrelevant because you’ve created something new.

Uncontested markets. New customer needs or experiences.

Example: Cirque du Soleil—blended

theater + circus, not just another circus

Red Ocean (Compete)

Existing markets.

◦ Same customer base.

◦ Example: Fast food chains fighting with value meals, promos, or price wars.

Global strategy options (ways to enter international markets)

-exporting, licnencing or franchsing, joint ventures, wholly ownerd subsidiaries

Exporting (selling abroad without heavy investment)

-Sell products directly to another country, usually via distributors or online platforms

-Pros: Low cost, low risk, easy entry.

Cons: Limited control over brand, relies on local partners or shipping.

Example: A Philippine food brand exporting dried mangoes to Japan.

Licensing / Franchising (sharing ur brand)

Allowing a local business to use your brand, products, or business model in exchange for fees or royalties.

Pros: Faster expansion, low cost for the parent company.

Cons: Less control, quality may vary across countries.

Example: Jollibee franchises in the Middle East

Licensing

for products (disnry licenses characters for toys)

Franchising

for services or retail (jollibee or mcdonalds abroad)

Joint ventures (partnership with local firms)

Teaming up with a local company to share resources, risks, and knowledge.

Pros: Access to local market knowledge, shared risk, easier regulatory approval.

Cons: Possible conflicts with partners, shared profits.

Example: Starbucks partnered with Tata in India to understand local coffee/tea culture.

Wholly-Owned Subsidiaries (full ownership)

A company sets up or acquires its own facilities abroad (factories, offices, stores).

Pros: Maximum control, full profit, strong global brand presence.

Cons: Most expensive, high risk, heavy investment required.

Example: Toyota building its own car factories in the US.

Digital Competition

the rise of platforms: connect buyers & sellers

Shopee → gamified, free shipping.

Lazada → Alibaba-backed, logistics focus.

Netflix vs Disney+ → battle of streaming content.

Risks of Globalization

-Cultural differences, exchange rate issues, political risks, overexpansion