Theories of corporate strategy

• Ansoffs matrix = marketing planning model that helps a business determine its product and market growth strategy

  
• Porters strategic mix = describes how a company pursues competitive advantage across its chosen market segment by using four generic strategies

  
• Aim for portfolio analysis = gain valuable insight into your market position, where to direct investments, how to enhance your own products, and the total category sales
• Kays distinctive capabilities = three distinctive capabilities that help a business to get added value and a competitive advantage through these 3 sectors - Architecture, reputation and innovation.
• Ansoff matrix: Market development involves finding and exploiting new market opportunities for existing products by:

  • Entering new markets abroad
  • Repositioning the product by selling to different customer profiles (selling to other businesses as well as direct to consumers)
  • Seeking complementary locations
• Ansoff matrix: Product Development involves selling new or improved products to existing customers by:

  • Developing new versions or upgrades of existing successful products
  • Redesigning packaging and aesthetic features
  • Relaunching heritage products at commercially convenient intervals
• Ansoff Matrix: Diversification is the most risky growth strategy as it involves targeting new customers with entirely new or redeveloped products

  • Examples of diversification include
  • Tesco launching a range of financial products including current accounts and credit cards
• The Boston Matrix:

  • The Boston Matrix is a portfolio analysis tool that considers the relative market share of a firm's products and the rate of growth within the market in which each product is sold

  
• Boston Matrix: Stars are products sold in high-growth markets and have a high level of market share:

  • Stars require some ongoing investment to maintain their market position and if managed well they are likely to become cash cows in the future
  • A market penetration strategy to increase sales revenue and maximise market share is likely to be appropriate
• Boston Matrix: Cash Cows are sold in lower-growth markets and have a high market share:

  • Cash cows generate more cash than they need to maintain their market position and can be used to fund the development of other products in the portfolio
  • Businesses may seek new markets for these products if it is relatively risk-free 
• Boston matrix: Question Marks are sold in high-growth markets and have a relatively low market share

  • Question Marks require significant investment if they are to improve their level of market share and become Stars
  • There is a risk that Question Marks will become Dogs when market growth rates slow
• Boston Matrix: Dogs are sold in low-growth markets and have a relatively low market share

  • Dogs have little potential for future growth and should be divested so that finance and effort may be invested in other products
• Achieving Competitive Advantage Through Distinctive Capabilities:

  • Operational skills and expertise within the business
  • Relationships and networks established within and around the business
  • Reputation and image of the business
  • Innovation and the ability to change
• Strategic Decisions on Resources:

  • Enter a new overseas market
  • Withdraw an obsolete product from the sale
  • Merge with a competitor