Strategic Direction 3.8.1

Question 1

what is Ansoff’s matrix

Answer 1

it is made to represents the risks in strategic decisions making. the further away on the matrix you go from your existing markets and products, the riskier it is

Question 2

what are the components of Ansoffs matrix

Answer 2

product from existing to new on the x axis

market from new to current on the y axis

existing,current=market penetration
new,current=product development
existing,new=market development
new,new=diversification

Question 3

what are the keys to finding the right strategic direction

Answer 3

making sure the strategy is achievable:
must take in to account company resources and market potential. needs to recognise economic and social circumstances

strategy must be company specific:
strategy might be different for different companies in the same market, depends on the company’s objectives

Question 4

what is market penetration, how can it be carried out, and what is the risk associated with it

Answer 4

This is about increasing market share by concentrating on existing products. this is the most common and safest strategy because it doesn't stray from what the company knows best. 
This can be done through:
finding new customers
taking consumers from competitors 
increasing current consumer usage

Question 5

what is market development, how can it be carried out, and what is the risk associated with it

Answer 5

This is about finding new markets for existing products.
This has a medium risk associated with this.
This can be carried out through:
repositioning the product (targeting a new market segment)
moving into new markets abroad

Question 6

what is product development, how can it be carried out, and what is the risk associated with it

Answer 6

product development means launching new products into existing markets. There is medium risk, it is a known market but has high cost associated with it through R&D and advertising and only1/6 succeed.
This can be carried out through:
developing new products
changing existing products

Question 7

what is diversification, how can it be carried out, and what is the risk associated with it

Answer 7

This is a new product in a new market. This has very high risk associated with it as it forces a new product to operate in a completely unknown market where you have no experience, yet this can lead to some of the greatest successes