Portfolio models, related and unrelated diversification, vertical integration, alliances and M&A strategy.
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- What is related diversification?
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Expansion into new markets or products related to existing business through shared markets, technologies, or competencies.- What is unrelated diversification?
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Expansion into new markets or products unrelated to existing business, also called conglomerate diversification.- Name the four quadrants of the BCG Growth-Share Matrix.
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Stars, cash cows, question marks (or problem children), and dogs.- In the BCG Matrix, what is a 'star'?
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High market growth and high relative market share; requires investment to maintain position.- In the BCG Matrix, what is a 'cash cow'?
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Low market growth and high relative market share; generates cash for investment elsewhere.- In the BCG Matrix, what is a 'question mark'?
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High market growth but low relative market share; uncertain future requiring strategic decisions.- In the BCG Matrix, what is a 'dog'?
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Low market growth and low relative market share; often divested or managed for cash.- Name the four strategies in the Ansoff Growth Matrix.
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Market penetration, product development, market development, and diversification.- What is market penetration strategy?
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Increasing sales of existing products in existing markets through promotion, pricing, or distribution improvements.- What is product development strategy?
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Creating new products for existing markets.- What is market development strategy?
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Selling existing products to new markets or geographic regions.- What is diversification strategy in the Ansoff Matrix?
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Developing and selling new products in new markets.- Define vertical integration.
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Acquiring or controlling operations at different stages of the value chain, either suppliers (backward) or distributors (forward).- What is backward vertical integration?
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Integrating with suppliers and controlling inputs earlier in the production value chain.- What is forward vertical integration?
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Integrating with distributors or moving closer to end customers later in the value chain.
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