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3.1.2 Theories of corporate strategy - Coggle Diagram
3.1.2 Theories of corporate strategy
Ansoff's Matrix
A framework for identifying corporate growth opportunities. Two dimensions determine the scope of options, namely products and market
the greater the degree of newness the greater the risk
market penetration
involves an increase n sales of existing products to existing markets - sellig more of the same product to the same people
market development
selling same product to different people
entering new markets or segments with existing products
gaining new customers, new segments, new markets
entering overseas market
product development
the creation of new products for the existing market
diversification
new products sold to new market
new products for new customers
risky strategy as it involves two unknowns
related diversification
development beyond present product market but still within broad confines of the industry
markets and products share some commonality with existing products
unrelated diversification
Growth in products + markets that are completely new
Development beyond present industry into products and markets which bear little relation to present product market mix
No commonality with existing products and markets
Uses of anoff's matrix
Framework to explore directions for strategic growth
Most commonly used model for analysing possible strategic direction a business should take
Encourages planners to consider both expected returns and risks
Real world examples don't fit nearly into the four cells of AM
Porter's strategic matrix
Identifies the sources of competitive advantages that a business might achieve in a market
Competitive strategy types
Lower cost strategy
Greater efficiencies than competitors
Differentiation stratgey
Unique/superior value, quality, features, services
Focus on niche strategy
Niche markets is a small segment of a much larger market
Cost leadership
Low-cost competitive strategy
Broad mass market
Economies of scale
Cost reductions
Cost minimisation
Differentiation
Broad mass market
Unique product/service
Premium prices charged
Large price sensitivity
Cost-focus
Means emphasing cost minimisation within a focused or niche market
Low-cost competitive strategy
Focus on market segment
Niche focused
Cost advantage in market segment
Differentiation focus
Specific group or geographical market focus
Differentiation in target market
Special needs of narrow target market
Stuck in the middle
No competitive advantage
Below average performance
Boston matrix
A theory that builds on the concept of the product life cycle but instead of focusing on just one product it looks at all the products sold by a business
It analyses the range of products a company had at any given point in time. It will consider growth rate, market share and cash flow
Dog
Product that is struggling with falling sales and market share
Star
Product that has seen growth for some time and now has a high market share
Problem child
Product that may have just been launched and has been in the design stage for some time
Cash cow
Established products that are now starting to see the market saturated and growth has fallen
