Chapter 39: Strategic Choice

Question 1

Define Ansoff’s matrix

Answer 1

Ansoff’s matrix: a model used to show the degree of risk associated with the four growth strategies of market penetration, market development, product development and diversification.

Question 2

Define Market penetration

Answer 2

Market penetration: achieving higher market shares in existing markets with existing products.

Question 3

Define product development

Answer 3

Product development: the development and sale of new products or new developments of existing products in existing markets.

Question 4

Define market development

Answer 4

Market development: the strategy of selling existing products in new markets.

Question 5

Define diversification

Answer 5

Diversification: the process of selling different,unrelated goods or services in new markets.

Question 6

Define Force-field analysis

Answer 6

Force-field analysis: technique for identifying and analysing the positive factors that support a decision (‘driving forces’) and negative factors that constrain it (‘restraining forces’).

Question 7

Define Decision tree

Answer 7

Decision tree: a diagram that sets out the options connected with a decision and the outcomes and economic returns that may result.

Question 8

Define expected value

Answer 8

Expected value: the likely financial result of an outcome obtained by multiplying the probability of an event occurring by the forecast economic return if it does occur.