3.8.1 Revision

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Strategic choices involve deciding the direction in which a business should move and the method by which it should pursue its plan
- 3.8.1 Strategic Direction
  - The strategic direction of a business refers to the decision made regarding the markets it competes in and the products it offers
  - Ansoff Matrix
    - Market penetration
      - Developing strategies to boost sales of existing products in existing markets
      - Business aims to boosts it market share
    - Diversification
      - High level of risk since the products and target customers are both unfamiliar
      - High levels of uncertainty
    - Market development
      - Offers existing products but targeting new markets segments with them
    - Product development
      - Developing new products for existing customers
  - Selecting a strategy considers many factors such as:
    - Opportunity costs
    - The fit with the resources and strengths of the business
    - Expected costs
    - Risk
    - Expected returns
    - Ethical issues involved
    - Impact on stakeholders
  - Long-term, high risk decisions that are full of uncertainty and determine the survival and ongoing success of a business
Offering new products to new customer groups
- Diversification
  - High level of risk since the products and target customers are both unfamiliar
  - High levels of uncertainty

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