Know that the money in money out and profit from a

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Know that the money in, money out and profit from a product will change over its life. More investment is needed earlier for smaller rewards, with more rewards coming later and lower investment needed. Extension strategies may require a source of finance if the strategy is expensive. Be able to break concepts down into individual characteristics and see the broader picture how they relate. E.g. It is unlikely that the creators of a new football team will see positive financial results until well into the growth stage. The team needs a lot of development, getting players, coaches, buildings etc., which require a lot of investment. Until the team can sell merchandise, memberships and tickets to games, there is going to be little inflows of cash and no profit. For both fans and sponsors, innovators will be taking a risk following the new team, and the success of the team is dependent on the quality of the product (winning). But if the product is of good quality, the addition of early and late adopters can increase cash inflow, help create profit and reduce the need for external investment. Know that most businesses will produce and sell more than one product and the same single strategy cannot be applied to the product portfolio as a whole. Know that the Boston Matrix classifies each of the products using the criteria market share and market growth to help the business develop it strategy. Know the four quadrants (Stars, Question marks, Cash Cows and Dogs) and what they represent. Be able to construct the Boston Matrix as well as combine and synthesize these ideas into a new idea and make a judgment based on the weight of evidence. E.g. The goal is to have a product as a Star when the market is growing, then move it to a cash cow when the market growth slows. iPad is an example of a Star, whereas iPhone is an example of a Cash Cow. Apple Watch is a question mark, as the market for this technology is growing, but Apple is not able to
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