3.8 Choosing strategic direction

Question 1

Market penetration

Answer 1

A strategy focused on increasing sales of existing products or services in current markets,
often through pricing adjustments, marketing campaigns, or expanding distribution channels.

Question 2

Market development

Answer 2

A strategy aimed at expanding into new market segments or geographical areas with existing
products or services, targeting new customer groups or market segments.

Question 3

New product development

Answer 3

The process of creating and introducing innovative products or services to meet evolving
customer needs or to enter new markets, involving research, design, testing and launch
phases.

Question 4

Diversification

Answer 4

A strategy involving the expansion of a company’s business activities into new products,
services and markets that are unrelated to its current offerings, aiming to spread risk and
capture new opportunities.

Question 5

Competitive advantage

Answer 5

The unique strengths, capabilities or resources that enable a company to outperform its
competitors and achieve superior performance in the marketplace, leading to increased
market share or profitability.