Choose strategic direction and compare options
Compare growth and market-creation options using Ansoff, Blue Ocean, scenario planning, force-field analysis and decision trees.
Cambridge International AS & A Level Business 9609, 2026–2028 syllabus and 2029 syllabus, section 6.2.1. Apply legal, economic and political examples to the relevant country and date. Written practice is self-checked. Specialist review has not been completed for this lesson; these exercises do not award an official mark or establish exam readiness.
Before you begin
- Use the lesson's stated business context and distinguish evidence from assumptions before recommending a response.
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
In Ansoff's matrix, what is market development?
What you will learn
- Use Ansoff's matrix to compare growth risk
- Explain Blue Ocean and scenario-planning approaches
- Use force-field analysis and decision trees as decision aids
Growth choices involve different types of uncertainty
Ansoff's matrix distinguishes market penetration (existing products, existing markets), market development (existing products, new markets), product development (new products, existing markets) and diversification (new products, new markets). Diversification is often higher risk because both product and market are unfamiliar, but actual risk depends on capabilities, evidence and investment.
Blue Ocean strategy seeks a less contested space by changing the value proposition and market boundaries rather than competing only on existing industry factors. It is not a promise that a market will remain uncontested; customer demand and imitation still matter.
Tools support, but do not replace, judgement
Scenario planning explores plausible futures and how choices might perform under them; it is not a prediction of one certain future. Force-field analysis identifies forces supporting or resisting a proposed change, then considers how these forces might be strengthened or reduced.
A decision tree maps choices, possible outcomes, probabilities and monetary values where estimates are available. Expected value can compare options when probabilities and payoffs are meaningful, but it excludes non-financial effects unless they are separately analysed. Check assumptions, time horizon and sensitivity before acting.
Pause and explain
What does scenario planning primarily help managers explore?
Worked example
A home appliance maker plans to sell its current product in a new country, and separately considers launching a new product for existing customers. Classify each Ansoff option.
Show the worked solution
- Current product plus new geographic market is market development.
- New product plus existing market is product development.
- Then test market, product and capability evidence before comparing risk.
Answer Selling the current product in a new country is market development. Launching a new product for existing customers is product development. Their relative risks depend on local demand, regulation, distribution and the firm's product-development capability, so the labels organise the options rather than rank them automatically.
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Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
A tutoring platform can sell its current service in a neighbouring country or develop an exam-preparation service for its existing market. Classify both routes and name one key uncertainty for each.
Give me a hint
Identify whether product, market or both change.
Compare my reasoning
- New country with current service is market development.
- New service for current market is product development.
- Check local rules and demand for one, and product capability and willingness to pay for the other.
The neighbouring-country route is market development; uncertainty includes local demand, regulations and delivery. The new exam-preparation service is product development; uncertainty includes subject expertise, content quality and customers' willingness to pay. The firm should compare these with its resources and objectives.
Look for these in your work
- Both routes are classified correctly
- Each has a relevant uncertainty
- Capability and context are considered
A hotel is choosing between expanding into a second city and renovating its existing site. Explain how scenario planning and a force-field analysis could help without deciding the answer automatically.
Give me a hint
Use scenarios for external futures and force-field analysis for change support and resistance.
Compare my reasoning
- Explore demand, costs or regulation under plausible city scenarios.
- List factors supporting and resisting each change.
- Test strength, controllability and evidence for each factor.
Scenario planning could test whether city expansion remains viable under different demand, cost or regulatory conditions. Force-field analysis could map factors supporting and resisting expansion or renovation, such as finance, staff skills and customer disruption. Managers should test the evidence and weights and compare financial, service and strategic effects before deciding.
Look for these in your work
- Tools are used for distinct purposes
- Internal and external factors appear
- Tool limitations are acknowledged
A firm compares two projects with uncertain returns using decision trees. State what a decision tree can show and two limits of the result.
Give me a hint
Show choice branches and possible outcomes, then challenge the inputs and omitted effects.
Compare my reasoning
- Map decisions, outcomes, probabilities and payoffs.
- Expected values depend on probability and payoff estimates.
- Assess sensitivity, strategic effects, risk capacity and non-financial impacts.
A decision tree can lay out choices, possible outcomes, probabilities and payoffs and calculate expected monetary values when those inputs are credible. The result depends on uncertain estimates and may hide risk or timing; managers should test sensitivity and separately consider strategic fit, ethics, capacity and non-financial effects.
Look for these in your work
- Tree components are explained
- Input uncertainty is recognised
- Non-financial and risk effects are considered
Common mistakes
- Calling diversification low risk because a market is growing
- Treating a scenario as a forecast
- Using expected value as the whole decision when probabilities or strategic effects are uncertain
What can you explain now?
In Ansoff's matrix, what is market development?
Compare with the explanation
Existing products sold in new markets
One dimension changes: the firm enters a different market with its current product.
After trying it yourself, choose your next review. This is your self-assessment.
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Make it stick
How do strategy tools help compare choices, and which assumptions or non-financial effects should still be tested?
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.