8.1 strategic direction: choosing which market to compete in and what products to offer Flashcards
4 parts of Ansoff’s matrix
Market penetration, market development, new product development, diversification
what is market penetration
strategy to boost sales of existing products in existing markets, aims to boost market share, relatively low risk, if market is mature (little potential growth) not best strategy
what is market development
existing products in a new market segment (either geographical or demographical), business needs to ensure that what its is offering will match the needs of the new market, it will need to do market research and also research on things such as competitors and suppliers, more risk
what is new product development
developing a new product for an existing market, respond to changes in customer requirements or anticipation of future changes, investment intro R+D takes time and also has a high risk of failure, big companies however could use a new product to expand their product portfolio which can spread risk
what is diversification
offering new products to a new market, high level of risk as both the product and the market is unfamiliar, high level of uncertainty, however risk is spread as not all products are the same or in the same market and so less vulnerable to change
