{"id":906,"date":"2015-09-21T05:14:12","date_gmt":"2015-09-21T05:14:12","guid":{"rendered":"https:\/\/courses.candelalearning.com\/waymakerintromarketing1xmaster\/?post_type=chapter&p=906"},"modified":"2016-02-25T18:43:54","modified_gmt":"2016-02-25T18:43:54","slug":"reading-strategic-opportunity-matrix","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-marketing\/chapter\/reading-strategic-opportunity-matrix\/","title":{"raw":"Reading: Strategic Opportunity Matrix","rendered":"Reading: Strategic Opportunity Matrix"},"content":{"raw":"The last strategic framework that we will consider is the strategic opportunity matrix (sometimes called the Ansoff matrix, named after\u00a0its creator, Igor Ansoff). Whereas the\u00a0SWOT analysis can help organizations\u00a0identify\u00a0new market\u00a0and new product opportunities <\/em>(it's the \"O\" in SWOT), the strategic opportunity matrix focuses on\u00a0different\u00a0growth strategies<\/em>\u00a0for\u00a0markets and products. The\u00a0matrix\u00a0examines\u00a0the following:\r\n
    \r\n\t
  1. New vs. existing\u00a0markets<\/em><\/li>\r\n\t
  2. New vs. existing products<\/em><\/li>\r\n<\/ol>\r\n
    \r\n
    \r\n\r\n\"Strategic<\/a>\r\n\r\n<\/div>\r\n<\/div>\r\nAs the diagram shows, each quadrant represents\u00a0a different growth strategy:\r\n
      \r\n\t
    1. Market penetration: focus on\u00a0current products and current markets with the goal of increasing market share<\/li>\r\n\t
    2. Market development: use existing products to capture new markets<\/li>\r\n\t
    3. Product development: create\u00a0new products that can be sold in existing markets<\/li>\r\n\t
    4. Diversification: create completely new opportunities by developing\u00a0new products that will be introduced in\u00a0new markets<\/li>\r\n<\/ol>\r\nEach strategy entails\u00a0a different level of risk. Market penetration has the lowest risk since it emphasizes known markets and existing products. Diversification has the highest risk because it involves\u00a0the development of\u00a0new products and taking them to new markets. The\u00a0company must consider\u00a0whether it can\u00a0achieve the desired returns without risking a move into new markets\u00a0or introducing new products.\u00a0Often, though, higher risk leads to a higher return.\r\n\r\nWhich strategy should the company pursue? The answer can be informed by a SWOT analysis, which takes into account the strengths and weakness of a company's existing products, as well as the opportunities and threats in the competitive market.\r\n

      Check Your Understanding<\/strong><\/h2>\r\nAnswer the question(s) below to see how well you understand the topics covered in this outcome. This short quiz does\u00a0not<\/strong>\u00a0count toward your grade in the class, and you can retake it an unlimited number of times.\r\n\r\nUse this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.\r\n\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/744","rendered":"

      The last strategic framework that we will consider is the strategic opportunity matrix (sometimes called the Ansoff matrix, named after\u00a0its creator, Igor Ansoff). Whereas the\u00a0SWOT analysis can help organizations\u00a0identify\u00a0new market\u00a0and new product opportunities <\/em>(it’s the “O” in SWOT), the strategic opportunity matrix focuses on\u00a0different\u00a0growth strategies<\/em>\u00a0for\u00a0markets and products. The\u00a0matrix\u00a0examines\u00a0the following:<\/p>\n

        \n
      1. New vs. existing\u00a0markets<\/em><\/li>\n
      2. New vs. existing products<\/em><\/li>\n<\/ol>\n
        \n
        \n

        \"Strategic<\/a><\/p>\n<\/div>\n<\/div>\n

        As the diagram shows, each quadrant represents\u00a0a different growth strategy:<\/p>\n

          \n
        1. Market penetration: focus on\u00a0current products and current markets with the goal of increasing market share<\/li>\n
        2. Market development: use existing products to capture new markets<\/li>\n
        3. Product development: create\u00a0new products that can be sold in existing markets<\/li>\n
        4. Diversification: create completely new opportunities by developing\u00a0new products that will be introduced in\u00a0new markets<\/li>\n<\/ol>\n

          Each strategy entails\u00a0a different level of risk. Market penetration has the lowest risk since it emphasizes known markets and existing products. Diversification has the highest risk because it involves\u00a0the development of\u00a0new products and taking them to new markets. The\u00a0company must consider\u00a0whether it can\u00a0achieve the desired returns without risking a move into new markets\u00a0or introducing new products.\u00a0Often, though, higher risk leads to a higher return.<\/p>\n

          Which strategy should the company pursue? The answer can be informed by a SWOT analysis, which takes into account the strengths and weakness of a company’s existing products, as well as the opportunities and threats in the competitive market.<\/p>\n

          Check Your Understanding<\/strong><\/h2>\n

          Answer the question(s) below to see how well you understand the topics covered in this outcome. This short quiz does\u00a0not<\/strong>\u00a0count toward your grade in the class, and you can retake it an unlimited number of times.<\/p>\n

          Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.<\/p>\n

          \t