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Strategic directions - Coggle Diagram
Strategic directions
Market penetration
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Has the benefits of exploring the knowledge and experience of the firm and exploits unique competencies and resources
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In markets with very little growth, market penetration can only be achieved at the expense of rival organisations and they are likely to respond with price reductions or marketing initiatives
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In declining markets, acquisition of competitor companies may offer a chance at market penetration without increasing rivalry
Market development
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A strategy of attempting to supply an unmodified product or service to a new market is unlikely to succeed
Market development takes two forms - geographic expansion through internationalisation or via new customers
Product development
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Desirability of this strategic direction will depend on the complexity of delivering product development
This strategy maintains the organisation's connections with the marketplace but will require new capabilities in terms of the product offer
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Ansoff's matrix is a product-market matrix which provides a useful framework for considering the relationship between strategic direction and market opportunities
The matrix offers four broad strategic directions an organisation can take to help in generating strategic options for the company
An organisation will still need to take into account the influences of the external and competitive environment and the resources and competencies of the firm
One way of overcoming the weaknesses inherent in all these strategic directions is acquisitions, merger or strategic alliance