Choosing Strategic Direction Key Terms

Strategic choice

The process of selecting best or most appropriate strategy from the group of alternatives

Strategic Decision

Identifying the best way to achieve goals and objectives

Ansoff Matrix

A model used when deciding a business' growth strategy. The four aspects are:

• Market penetration

• Market development

• Product development

• Diversification.

Diversification

A strategy that involves developing new products and services for market expansion

Product development

A series of steps that includes the conceptualisation, design, development and marketing of newly created or rebranded goods and services

Differentiation strategy

A business approach where organisations make a unique and distinct offering to their customers to stay ahead of their market competitors

Market development

A growth strategy that identifies and develops new market segments for current products

Consolidation

The merger and acquisition of many smaller companies into a few much larger ones

Market penetration

A measure of how much a product or service is being used by target customers compared to the total estimated market for that product or service

Cost leadership strategy

A strategy aiming to establish a competitive advantage by having the lowest cost of operation in the industry