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3.1.1 Corporate objectives & 3.1.2 Theories of corporate strategy Typeit
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THEORIES OF CORPORATE STRATEGY
Matrix is a decision-making tool to help a business to identify all its current products or services and its markets, then consider its future options for expansion using the matrix shown, considering opportunities, associated costs, benefits and risks. It helps a business to identify new markets and opportunities; for example, selling colouring books to adults to jump on the mindfulness and stress-busting trend.
Strategic Matrix is a theory which suggests that a business has the choice of three generic strategies that will help it to achieve competitive advantage - cost leadership, differentiation and focus - and that a business which failed to select one of these strategies would be in danger of getting "stuck in the middle". This could explain why high-end designer shops rarely have sales or offer discounts.
The Matrix is marketing planning tool which helps a business to identify which groups of products deserve the marketing budget. It divides products into question marks, stars, cash cows and dogs. It is closely linked with the product life cycle. For example dogs might be products in the decline phase of the life cycle, and would not attract any of the marketing budget.
Distinctive Capabilities Theory suggests that to get competitive advantage a business needs to concentrate on three distinct areas. The first is the architecture or the relationship structure that a business has with its suppliers, employees and customers. The second is reputation and describes the customer experience. The final capability is the ability of the business to innovate.
decisions are long-term and proactive decisions that the business makes about its objectives and the strategies it will use to achieve them.
decisions are short-term and reactive decisions that the business makes and tend to involve problem- present-day issues rather than looking further ahead.