UNIT 4a

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What is Market Penetration in Ansoff's Matrix?
Existing product in an existing market. Maintain/increase market share, eg loyalty cards.
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What is Market Development in Ansoff's Matrix?
Existing product in a new market. New packaging, distribution channels, prices.
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What is Product Development in Ansoff's Matrix?
New product in an existing market. R&D innovation, insight to customer needs.
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What is Diversification in Ansoff's Matrix?
New product in a new market. Need clear aims/objectives, risk from unknown territory.
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What are the advantages of Ansoff's Matrix?
Analyse strategic position and set objectives, indicates level of risk, sub divides options which could be considered for L/T growth.
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What are the disadvantages of Ansoff's Matrix?
No guarantee of success, more useful with other models, greater risk of failure towards new product and market.
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What does the usefulness of Ansoff's Matrix depend on?
Business objectives, resources available, market conditions, legal factors.
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What is Cost Leadership in Porter's Strategic Mix?
Advantage through being lowest cost producer in the market, gaining economies of scale. Generic products at a similar price.
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What is Cost Focus in Porter's Strategic Mix?
Focus on niche markets. Low cost advantage due to basic products similar to high price ones.
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What is Differentiation Focus in Porter's Strategic Mix?
Differentiate within target market, market segmentation. USP to charge higher prices to gain advantage.
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What is Differentiation Leadership in Porter's Strategic Mix?
Target larger market, advantage across whole industry. Premium price due to added value and high production costs.
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What are the advantages of Porter's Strategic Mix?
Focuses on potential advantage and so increases motivation, discover pros and cons of industry.
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What are the disadvantages of Porter's Strategic Mix?
Other tools needed to be more useful, eg S,W,O,T of each strategy. One strategy needed, can't be stuck in the middle due to different audiences and approaches for each strategy.
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What is Threat of New Entrants in Porter's Five Forces?
How easy it is for firms to enter the market, firms want to make it harder. Eg high start up costs, patent products, control distribution channels.
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What is Supplier Power in Porter's Five Forces?
Suppliers want highest price, power determined by uniqueness of materials, substitutes, demand for materials.
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What is Buyer Power in Porter's Five Forces?
Buyers want cheapest price, can negotiate prices, power determined by number of buyers and sellers, size of orders.
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What is Threat of Substitutes in Porter's Five Forces?
Likelihood of consumers buying alternative product, can be costly to switch brand so reluctant to, limit price if many substitutes, threat determined by customer loyalty, price and quality of substitute.
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What is Rivalry Within the Industry in Porter's Five Forces?
Amount of competition, common in standardized products, prices cut to raise demand, determined by number of competitors, brand loyalty.
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What are the advantages of PESTLE?
Easy concept, highlight and reduce risk of threat before, encourage strategic thinking to use elsewhere.
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What are the disadvantages of PESTLE?
Only external so need to be used alongside SWOT, simplistic concept which can lead to poor thinking and decisions, hard to predict future implications which will affect business.
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What are the strengths of Center Parcs in SWOT?
Brand image, premium price, 96% annual occupancy, environmentally friendly.
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What are the weaknesses of Center Parcs in SWOT?
Costs to be environmentally friendly, high prices may put people off, niche market.
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What are the threats to Center Parcs in SWOT?
Competition, health and safety laws may change, growth of hotel sector, changing demand.
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What are the opportunities for Center Parcs in SWOT?
More locations - become international, different target markets eg target different age groups.
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What are the advantages of SWOT analysis?
Develop goals and strategies to achieve them, better understanding of business, take action on S,W,O,T's.
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What are the disadvantages of SWOT analysis?
Doesn't prioritise issues, doesn't provide solutions or alternate decisions.
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What is the formula for contribution?
Selling Price - Variable Costs.
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What needs to be considered when accepting a Special Order Decision?
If the capacity is available, impact of culture and stakeholders, may lead to future sales despite small initial contribution.
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What are the advantages of Contribution?
Simple to calculate, helps decide prices, give better quality decisions.
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What are the disadvantages of Contribution?
Needs to be used with other tools, variable costs may change so inaccurate figures.
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What may result from accepting a Special Order?
Others may expect the same price, customer relationships may suffer, working harder to motivation may drop and affect quality, no flexibility as working at full capacity.
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Card 2

Front

What is Market Development in Ansoff's Matrix?

Back

Existing product in a new market. New packaging, distribution channels, prices.

Card 3

Front

What is Product Development in Ansoff's Matrix?

Back

Preview of the front of card 3

Card 4

Front

What is Diversification in Ansoff's Matrix?

Back

Preview of the front of card 4

Card 5

Front

What are the advantages of Ansoff's Matrix?

Back

Preview of the front of card 5
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