3.1.2 THEORIES OF CORPORATE
STRATEGY questions and answers
How does a business use the Boston Matrix? - correct answer-It helps managers to plan for
a balanced product portfolio.
It looks at two dimensions, market share and market growth, in order to assess new and
existing products in terms of their market potential.
A business would place each individual product in its product portfolio onto one of the
quadrants of the Boston Matrix based on the product's relative market share and the
product's market growth in the industry.
What are the factors of 'cost leadership'? - correct answer-Useful in highly competitive
markets where there are homogenous products.
Customers may frequently switch supplier to gain best value.
New entrants to the market will use low process to build a customer base.
What are the factors of 'differentiation'? - correct answer-Useful strategy in highly
technological markets where there are rapidly changing and evolving features of products
and services.
Where customer needs are very diverse.
Where the competitors in the market are all following a similar differentiation strategy.
What are the features of 'cost focus'? - correct answer-Useful strategy when the business
wants to offer very low prices to a small market segment.
Niche marketing but at a very low cost.
What are the features of 'differentiation focus'? - correct answer-Useful strategy when the
business wants to offer products and services to a small market segment.
Products or services will be differentiated and aimed at a niche market.
What are the features of strategic decisions? - correct answer-Long term direction of the
business.
What the business will do to meet its aims and objectives.
Pro-active decision making.
Forward thinking, future planning.
What are the features of tactical decisions? - correct answer-Short or medium term
decisions.
How the business will implement its strategy.
Reactive to competitor actions.
Present day thinking, what is happening now that needs dealing with.
What are the four features of the Boston Matrix? - correct answer-Star
Question Mark/Problem Child
Cash Cow
STRATEGY questions and answers
How does a business use the Boston Matrix? - correct answer-It helps managers to plan for
a balanced product portfolio.
It looks at two dimensions, market share and market growth, in order to assess new and
existing products in terms of their market potential.
A business would place each individual product in its product portfolio onto one of the
quadrants of the Boston Matrix based on the product's relative market share and the
product's market growth in the industry.
What are the factors of 'cost leadership'? - correct answer-Useful in highly competitive
markets where there are homogenous products.
Customers may frequently switch supplier to gain best value.
New entrants to the market will use low process to build a customer base.
What are the factors of 'differentiation'? - correct answer-Useful strategy in highly
technological markets where there are rapidly changing and evolving features of products
and services.
Where customer needs are very diverse.
Where the competitors in the market are all following a similar differentiation strategy.
What are the features of 'cost focus'? - correct answer-Useful strategy when the business
wants to offer very low prices to a small market segment.
Niche marketing but at a very low cost.
What are the features of 'differentiation focus'? - correct answer-Useful strategy when the
business wants to offer products and services to a small market segment.
Products or services will be differentiated and aimed at a niche market.
What are the features of strategic decisions? - correct answer-Long term direction of the
business.
What the business will do to meet its aims and objectives.
Pro-active decision making.
Forward thinking, future planning.
What are the features of tactical decisions? - correct answer-Short or medium term
decisions.
How the business will implement its strategy.
Reactive to competitor actions.
Present day thinking, what is happening now that needs dealing with.
What are the four features of the Boston Matrix? - correct answer-Star
Question Mark/Problem Child
Cash Cow
