Strategic Direction (AQA A Level Business): Exam Questions

A women’s clothes store adds furniture to its range in order to increase spending by its existing customers.

According to Ansoff’s matrix this is an example of

The owner of a business which sells hot drinks asks a focus group of customers for their views. This market research reveals that customers prefer to have cakes with their drinks. In terms of Ansoff’s matrix, the subsequent decision to introduce cakes is an example of:

In terms of Ansoff’s matrix, is market penetration always a better strategic direction than diversification?

Justify your view.

Statement 1: ‘According to Ansoff, market penetration involves selling an existing product in a new market.’
Statement 2: ‘According to Ansoff, diversification can be either developing a new product or entering a new market.’

Read statements 1 and 2 and select the correct option from the following

A UK business has experienced slow growth in sales in recent years. It has decided to achieve higher growth through new product development.

Do you believe that this is a more risky strategy than market development? Justify your view.

Starbucks is an American coffee shop. In recent years it has opened over 300 tea shops in America to appeal to its existing customers. According to Ansoff’s matrix this is an example of