AQA A LEVEL BUSINESS 3.8 EXAM 2025 QUESTIONS WITH
ANSWERS.
Define Ansoff's matrix - ANSWER-Method of analysing the risks associated with
different market positioning strategies
Define market penetration - ANSWER-The strategy of achieving growth through
targeting existing customers with existing products
Examples of market penetration strategies x2 - ANSWER-Product - slight alterations
(size,colour etc.)
price - sales /special offers
Reasons for market penetration x2 - ANSWER-Least risky option - know customers and
products
If there has been an increase in market size
The value of market penetration x2 - ANSWER-Relatively cheap option for growth
Is focused on building on established core comptences
Define market development - ANSWER-The strategy of achieving growth through
targeting new customers with existing products
Example of market development strategies x2 - ANSWER-Product - changing
packaging
Promotion - emphasising different benefits of the product
Reasons for market development x2 - ANSWER-Have a successful product and model
that is replicable in new markets
fall in the size of target market
Value of market development x2 - ANSWER-Little need for expensive product
development
Build on business reputation
Drawbacks of market development x2 - ANSWER-Need for market research - new
customers and competitors
may face cultural difficulties
Define product development - ANSWER-The strategy of achieving growth through
targeting existing customers with new products
Example of product development strategies x2 - ANSWER-Product - updates , new
releases , changing colour and innovation
price - releasing a cheaper , basic version
, Reasons for product development x2 - ANSWER-Replace products at the end of their
lifecycle
Maintain demand and customer loyalty
Value of product development x2 - ANSWER-Maintain customer loyalty
Create new revenue streams
Drawbacks of product development x2 - ANSWER-Can be very expensive , may require
extensive investment in R&D
Risk of failure
Define diversification - ANSWER-The strategy of achieving growth through targeting
new customers with new products
Example of diversification strategies x2 - ANSWER-Product - market research , R&D ,
'copy cat' products , transferring core competence into new use
price - will depend on objectives
Reasons for diversification x3 - ANSWER-Organisation has trusted brand image that is
transferrable
Lack of growth opportunities
high levels of competition in the current market
Value of diversification x2 - ANSWER-Create opportunities for growth
enhance brand image
Drawbacks of diversification x2 - ANSWER-Highest risk strategy - Don't know product or
consumers
Likely to be very expensive, may require extensive investment in market research, R&D
and promotion
Poter's genetic strategies graph - ANSWER-
Define cost-leadership - ANSWER-A strategy of selling a low cost product aimed at a
mass market
Requirements for cost- leadership x2 - ANSWER-Organisations are able to take
advantage of EOS - technical , managerial , bulk buying
Focus on cost minimisation - materials , labour
Benefits of cost - leadership x2 - ANSWER-Appeals to price sensitive consumers
effective in a recession (selling 'inferior goods')
Costs of cost-leadership x2 - ANSWER-Product quite 'basic' - risk of new entrants
Products are price elastic - difficult to raise prices
ANSWERS.
Define Ansoff's matrix - ANSWER-Method of analysing the risks associated with
different market positioning strategies
Define market penetration - ANSWER-The strategy of achieving growth through
targeting existing customers with existing products
Examples of market penetration strategies x2 - ANSWER-Product - slight alterations
(size,colour etc.)
price - sales /special offers
Reasons for market penetration x2 - ANSWER-Least risky option - know customers and
products
If there has been an increase in market size
The value of market penetration x2 - ANSWER-Relatively cheap option for growth
Is focused on building on established core comptences
Define market development - ANSWER-The strategy of achieving growth through
targeting new customers with existing products
Example of market development strategies x2 - ANSWER-Product - changing
packaging
Promotion - emphasising different benefits of the product
Reasons for market development x2 - ANSWER-Have a successful product and model
that is replicable in new markets
fall in the size of target market
Value of market development x2 - ANSWER-Little need for expensive product
development
Build on business reputation
Drawbacks of market development x2 - ANSWER-Need for market research - new
customers and competitors
may face cultural difficulties
Define product development - ANSWER-The strategy of achieving growth through
targeting existing customers with new products
Example of product development strategies x2 - ANSWER-Product - updates , new
releases , changing colour and innovation
price - releasing a cheaper , basic version
, Reasons for product development x2 - ANSWER-Replace products at the end of their
lifecycle
Maintain demand and customer loyalty
Value of product development x2 - ANSWER-Maintain customer loyalty
Create new revenue streams
Drawbacks of product development x2 - ANSWER-Can be very expensive , may require
extensive investment in R&D
Risk of failure
Define diversification - ANSWER-The strategy of achieving growth through targeting
new customers with new products
Example of diversification strategies x2 - ANSWER-Product - market research , R&D ,
'copy cat' products , transferring core competence into new use
price - will depend on objectives
Reasons for diversification x3 - ANSWER-Organisation has trusted brand image that is
transferrable
Lack of growth opportunities
high levels of competition in the current market
Value of diversification x2 - ANSWER-Create opportunities for growth
enhance brand image
Drawbacks of diversification x2 - ANSWER-Highest risk strategy - Don't know product or
consumers
Likely to be very expensive, may require extensive investment in market research, R&D
and promotion
Poter's genetic strategies graph - ANSWER-
Define cost-leadership - ANSWER-A strategy of selling a low cost product aimed at a
mass market
Requirements for cost- leadership x2 - ANSWER-Organisations are able to take
advantage of EOS - technical , managerial , bulk buying
Focus on cost minimisation - materials , labour
Benefits of cost - leadership x2 - ANSWER-Appeals to price sensitive consumers
effective in a recession (selling 'inferior goods')
Costs of cost-leadership x2 - ANSWER-Product quite 'basic' - risk of new entrants
Products are price elastic - difficult to raise prices
