Key term 8

• Strategic direction 


  Overall plan for which markets & products a business focuses on
• Market


  Where buyers and sellers come together
• Product


  Good or service
• Market penetration 


  Selling more of the existing product to existing market
• Product development 


  Selling new products
• Market development 


  Selling existing products to new markets
• Diversification 


  Selling new products to new markets
• Risk


  Chance of loss or failure
• Core competencies 


  Things a business does really well that gives them advantage
• Competitive advantage 


  Advantage a business has over rivals
• Cost advantage 


  Competing by being the lowest cost producer
• Differentiation 


  Making a product or brand stand out from competitors
• Added value 


  Difference between cost of inputs and final selling product
• Market analysis 


  Studying data to understand customer needs and competition
• Swot analysis 


  Strengths, weakness, opportunities & Threats
• External environment 


  Outside factors which affect a business
• Strategy 


  A plan of action to achieve long term and overall aims
• Cost leadership

  When business becomes lowest cost producer in its industry