ACCA Strategic Business Leader (SBL) Practice Exam

What matrix helps in decision-making regarding market penetration or product development?

1. Harmon's process-strategy matrix

2. BCG Matrix

3. Ansoff’s matrix

4. SWOT Analysis

The correct answer is: Ansoff’s matrix

Ansoff’s matrix is a strategic tool that is instrumental in decision-making related to market penetration and product development. This matrix provides a clear framework for businesses to evaluate growth opportunities through four strategic options: market penetration, market development, product development, and diversification. In the context of market penetration, the matrix emphasizes strategies that focus on increasing sales of existing products in existing markets. This may involve enhancing marketing efforts, improving customer service, or adjusting pricing strategies to gain a larger market share. For product development, the matrix guides organizations in creating new products to serve their existing customer base, which can be crucial for maintaining competitiveness and responding to customer needs or trends in the market. The usefulness of Ansoff’s matrix lies in its simplicity and clarity, allowing businesses to align their growth strategies with their overall objectives and resources while evaluating risk levels associated with each approach. Consequently, it serves as a valuable decision-making tool for managers contemplating how to expand their market presence or enhance their product offerings effectively.