Theories of Corporate Strategy

What is market penetration?

Existing product in existing market

What is market development?

Existing product in new market

What is product development?

Existing market with new product

What is diversification?

New product in new market

Which strategy in Ansoff’s Matrix is the least risky?

Market penetration

Which strategy in Ansoff’s Matrix is the most risky?

Diversification

How can you carry out market penetration?

• Promotion

• Extension strategies

When is market penetration not appropriate?

In a saturated market

When is product development good to implement?

If you have high market share and good cash flow

What do you need to finance for product development?

Research and development

What do you need to finance for market development?

Market research

When does diversification make sense?

Current market is saturated and the business has small product range with all in the decline stage

What are Porter’s Generic Strategies?

• Cost leadership

• Differentiation

• Cost focus

• Differentiation focus

What happens when businesses don’t follow one of the Porter’s Generic Strategies?

Stuck in the middle - likely to fail

What are Kay’s Distinctive Capabilities?

• Architecture

• Innovation

• Reputation

What does Kay mean by Architecture?

Relationship with key stakeholders

Why is architecture important?

Suppliers will give better service, shareholders and community will be more tolerant

What does Kay mean by innovation?

Developing new ideas

What does Kay mean by reputation?

Customer experience

How do you choose which of Kay’s Distinctive Capabilities to follow?

Cost, risk, stakeholders, strengths