Strategic Option GenerationEnterprise Strategy/AW/06

Arj Wignaraja

3 Key Questions in Strategy and How We Answer Them

Where to compete? How to compete?

Porter’s generic strategies

Which investment vehicle to use?

1. Acquisitions

2. Joint methods

3. Divestments

Ansoff Matrix

BCGMatrix

Which markets/products/SBUs should be part of

ourportfolio?

For each SBU, what should be

the basis of competitive advantage?

How should the organization

pursue the new opportunity?

Product-Market Strategies– The Ansoff Matrix

Products

Mark

ets

Existing New

Exis

ting

New

MarketPenetration

MarketDevelopment

ProductDevelopment

Diversification• Related• Unrelated

Market Penetration – The Ansoff Matrix

Products

Mark

ets

Existing New

Exis

ting

New

MarketPenetration

Market Development Strategies – The Ansoff Matrix

Products

Mark

ets

Existing New

Exis

ting

New Market

Development

Product Development Strategy– The Ansoff Matrix

Products

Mark

ets

Existing New

Exis

ting

New

ProductDevelopment

Diversification Strategies– Related – The Ansoff Matrix

Products

Mark

ets

Existing New

Exis

ting

New Diversification

• Related

Diversification Strategies– Unrelated – The Ansoff Matrix

Products

Mark

ets

Existing New

Exis

ting

New Diversification

• Unrelated

Theory in Practice (TIP): Starbucks and the Ansoff Matrix

Products

Mark

ets

Existing New

Exis

ting

New

Market Penetration

Market Development

Product Development

Diversification

Porter’s Model of Generic Strategies

Strategic Advantage

Scop

e

Uniqueness perceivedby customer Low Cost Position

Bro

ad

Narr

ow

COSTLEADERSHIP

Cost Focus

DIFFERENTIATION

DifferentiationFocus

FOCUS

Theory in Practice (TIP): Porter’s Generic Strategies

Cost Leadership Differentiation Focus

Theory in Practice: Apple & Porter’s Generic Strategies

Strategic Advantage

Scope

Narrow

Broad

Uniqueness perceived by customer

Low cost position

DIFFERENTIATION COST LEADERSHIP

FOCUS