What is Diversification? Diversification is a technique of allocating portfolio resources or capital to a mix of different investments. The ultimate goal of diversification is to reduce the volatility of the portfolio by offsetting losses in one asset class with gains in another asset class. A phrase commonly associated with diversification: “Do not put all…
What is Kaizen? Kaizen is a Japanese word (改善) that means “improvement” or “to improve.” When applied to the world of business, kaizen refers to every action, operation, or rule employed to implement changes within a company to make it operate more efficiently and effectively. In the western world, the focus of kaizen on maximizing…
What is Competitive Intensity? In strategy, competitive intensity is defined as the extent to which companies within a specific industry exert pressure on one another. Some level of competition is healthy because it acts as an impetus for innovation within organizations. Competition, whether in an industry or another setting, drives teams and individuals to give…
What is a Micro-Investing Platform? A micro-investing platform is an application that eases the process of investment by enabling users to save and invest small amounts of money periodically. Micro-investing platforms are different from conventional investment schemes in the sense that there is no minimum limit on the amount that can be saved. Also, they…
What is Systems Thinking? Systems thinking is an approach to analysis that zeros in on how the different parts of a system interrelate and how systems work within the context of other, larger systems. It is a holistic approach that can be used in many areas of research. It can be useful in analyzing a…
What is the Boston Consulting Group (BCG) Matrix? The Boston Consulting Group Matrix (BCG Matrix), also referred to as the product portfolio matrix, is a business planning tool used to evaluate the strategic position of a firm’s brand portfolio. The BCG Matrix is one of the most popular portfolio analysis methods. It classifies a firm’s…
What is Loss Leader Pricing? A loss leader pricing strategy, a term common in marketing, refers to an aggressive pricing strategy in which a store prices its goods below cost to stimulate sales of other, profitable goods. With such a pricing strategy, a business is selling its goods at a loss to lure customer traffic…
What is Penetration Pricing? Penetration pricing is a pricing strategy that is used to quickly gain market share by setting an initially low price to entice customers to purchase. This pricing strategy is generally used by new entrants into a market. An extreme form of penetration pricing is called predatory pricing. Rationale Behind Penetration Pricing…
What is Guerrilla Marketing? Guerrilla marketing refers to an advertising strategy that focuses on using low-cost marketing techniques to generate maximum exposure for a product or service. The term “guerrilla marketing” was used in the 1984 book, “Guerrilla Advertising”, by American business writer Jay Conrad Levinson. Due to the emergence of the internet, guerrilla marketing…
