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Theories of corporate strategy (The Ansoff Matrix (product development -…
Theories of corporate strategy
Distinctive Capabilities
This is a business strategy concept which a successful company achieves a competitive advantage other firms can not replicate by doing something unique
Innovation
Innovation can be defined simply as a "new idea, device or method", this could be anything from creating a new product or going into a new market
Architecture
This is the relation the business has with its employees, customers and people with an specific interest in the business
Reputation
This is built up through the customers own experience and this could be their quality, brand, whether they recommend to others
The Ansoff Matrix
product development - is a new product in an existing market
Diversification - A new product in a new market
market penetration is a current product entering a current market• - Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling
A strategy of product development is particularly suitable for a business where the product needs to be differentiated in order to remain competitive.A successful product development strategy places the marketing emphasis on:
•Research & development and innovation
•Detailed insights into customer needs (and how they change)
•Being first to market
market development - A new product in a new market
Porter’s Strategic Matrix
Porter suggested four "generic" business strategies that could be adopted in order to gain competitive advantage. The strategies relate to the extent to which the scope of a business' activities are narrow versus broad and the extent to which a business seeks to differentiate its products. The key strategic challenge for most businesses is to find a way of achieving a sustainable competitive advantage over the other competing products and firms in a market.
Cost Leadership
Aim to become low cost producer. Larger the firm, in theory, larger the economies of scale. This minimises costs and will enjoy best profits.
The Differentiation Strategy
The Focus Strategy
There are 3 types of distinctive capabilities
