D077: MODULE 4

Strategic Opportunity Matrix

Framework that maps the four growth strategies (market penetration, market development, product development, and diversification) to a grid based on whether they address new or existing products and markets

What is a company's market share?

A company's percentage of the total sales in an industry

What does the strategic opportunity matrix examine?

New versus existing markets

What is the name of a means of evaluating a company's plans for growth based on new versus existing markets and new versus existing products?

Strategic opportunity matrix

Why is a growth strategy important to a company?

It provides a planning tool to simplify, organize, and focus the possible options for growth for the company.

The four basic growth strategies according to the Strategic Opportunity Matrix are

market penetration, market development, product development, and diversification.

Market penetration

This growth strategy uses current products and current markets with the goal to increase market share.

Market development

This growth strategy uses existing products to capture new markets.

Product development

This growth strategy uses new products in the existing market.

Diversification

This strategy creates completely new opportunities for the company by creating new products and new markets.

Which growth strategy utilizes new markets with existing products using the strategic opportunity matrix?

Market development

Which growth strategy utilizes new markets with new products using the strategic opportunity matrix?

Diversification

Which growth strategy utilizes existing markets with existing products using the strategic opportunity matrix?

Market penetration

Which growth strategy utilizes existing markets with new products using the strategic opportunity matrix?

Product development

When does market penetration occur?

When a company increases sales in a market in which its products already exist

What does a market development strategy do for a company?

Targets new customers and new segments to expand the sales base

In which stage of the product life cycle does new product development occur?

Introduction

What is diversification?

Diversification increases profitability through greater sales volume obtained from new products and new markets.