AQA A Level Business 3.8 - Choosing Strategic Direction

3.8 – Choosing Strategic Direction


Ansoff’s Matrix 1

Ansoff’s Matrix – A tool to help managers devise strategies for growth


Existing products New products
Existing markets
Market penetration Product development

New markets
Market development Diversification




Market penetration – Trying to increase demand of products they already sell
 Existing products in existing markets
 Low risk
Examples:
 Head and Shoulders changed their packaging to encourage people to use it daily
 Colgate increased the size of their toothbrush head to fit more toothpaste
 Cornflakes encouraged people to eat cereal at night




Market development
 Existing products in new markets
 Medium risk
Examples:
 Tesco branched out to American and European markets
 MasterChef branched out from the UK to Australia




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, 3.8 – Choosing Strategic Direction


Ansoff’s Matrix 2

Product development
 New products in existing markets
 Medium risk
Examples:
 Cherry Coke
 McDonald’s PLT




Diversification
 New products in New markets
 High risk
Examples:
 Virgin
 HMV




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