Study Strategy matrices in global marketing in the Pearson Edexcel A Level Business specification, with the knowledge and exam application needed for accurate mark-scheme…
Source for use with Extract D Here are four big opportunities Harley-Davidson will tackle in the future Harley-Davidson is an American manufacturer of large, powerful motorcycles designed for use on the American highways. However, the motorcycle market in the US has been declining for years. Young Americans are not buying motorcycles as they used to and there are now fewer young riders. Harley-Davidson is considering a new global strategy and is developing several key areas. The brand has a loyal and committed global following. It will continue to produce the large and profitable motorcycles that have made it a worldwide icon. At the same time, it is developing a range of lighter, middle-weight motorcycles to compete with the likes of Ducati and Japanese manufacturers in the US and European markets. Overseas, it will focus on Asia and especially India, where the motorcycle market is expected to experience considerable growth in the coming years. The problem is that although motorcycles are a favoured form of transportation there, people prefer much smaller bikes than Harley-Davidson currently makes. So it plans to set up overseas partnerships with Asian companies to manufacture and sell new smaller motorcycles in the profitable Asian markets. Harley-Davidson has also developed an electric motorcycle which went on sale in 2019. Like electric cars, electric motorcycles have not yet experienced rapid growth in the key markets of the US and Europe. The overall market is small but expected to grow. Electric motorcycles should also be poised for growth in Asia, notably China, where the government is backing electrification.
Evaluate the usefulness of Ansoff's matrix for a business such as Harley-Davidson, when developing a global marketing strategy.
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- Ansoff's matrix is a tool designed to highlight the elements of a
business strategy that will lead to growth and the development of a
successful business portfolio
- It divides a business on the basis of the products it has or could have
and the markets it has or could have
- It indicates the relative risk of the options and can guide decision
making
- By concentrating on its existing big bikes it is following a market
penetration strategy
- This is the least risky option because it is profitable and has loyal
global customers but is unlikely to lead to high future growth
- By producing smaller middle-weight bikes it can increase market share
in the US and Europe, this is product development
- This is slightly riskier, as although Harley-Davidson has expertise in bike
production it faces established competition from Ducati and the
Japanese manufacturers
- Market development is a possibility that Harley-Davidson has rejected
as the new and rapidly growing markets do not want their existing
products
- This leaves diversification, the riskiest strategy of all, with new
products and new markets
- Harley-Davidson is following this with its new bikes and joint ventures in
the Asian markets. It does not have the expertise yet to manufacture
smaller bikes and working with a partner can be fraught with
problems, particularly in Asia
- Harley-Davidson is also developing a completely electrically powered
bike which may or may not be successful. It has to overcome
consumer resistance and the risk of China being more successful with
its own electric motorcycles
- However, Ansoff is only a theoretical and simplistic tool that takes no
account of changing economic and market conditions
- It does not take into account the actions of competitors that will react
to Harley-Davidson's strategy and develop their own plans
- While Ansoff's matrix may be a starting point on which to base a
strategy, it cannot be used alone to justify the decision that is made
- Much more research is needed into market conditions and consumer
preferences
Level
Mark
Descriptor
0
No rewardable material.
Level 1
1-4
Isolated elements of knowledge and understanding. Weak or no relevant application of business examples.
An argument may be attempted, but will be generic and fail to connect cause(s) and/or consequence(s)/effect(s).
Level 2
5-8
Elements of knowledge and understanding, which are applied to the business example.
Arguments and chains of reasoning are presented but connections between cause(s) and/or consequence(s)/effect(s) are incomplete. Attempts to address the question.
A comparison or judgement may be attempted but it will not successfully show an awareness of the key features of business behaviour or business situation.
Level 3
9-14
Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.
Uses developed chains of reasoning, so that cause(s) and/or consequence(s)/effect(s) are complete, showing an understanding of the question. Arguments are well developed.
Quantitative and/or qualitative information is introduced in an attempt to support judgements, a partial awareness of the validity and/or significance of competing arguments and may lead to a conclusion.
Level 4
15-20
Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.
Uses well-developed and logical, coherent chains of reasoning, showing a range of cause(s) and/or effect(s). Arguments are fully developed.
Quantitative and/or qualitative information is/are used well to support judgements. A full awareness of the validity and significance of competing arguments/factors, leading to balanced comparisons, judgements and an effective conclusion that proposes a solution and/or recommendations.
Question
Number
Indicative content