Active learning ideas
Strategic direction is about the 'where' and 'how' of business growth. Ansoff's Matrix provides the primary framework for this, categorising growth strategies into market penetration, market development, product development, and diversification. Students evaluate the varying levels of risk associated with each quadrant, particularly the high risk of diversification where both the product and the market are unknown to the firm. This unit is essential for students to understand how businesses scale and the trade-offs between safety and potential reward.
Activity 01
Place logos of well-known companies (e.g., Greggs, Apple, Netflix) around the room. Students move around and place each company's recent move (e.g., Greggs launching vegan rolls) into the correct Ansoff quadrant.
What are the four strategies in Ansoff's Matrix?
Activity 02
One side argues that a struggling high-street retailer should stick to market penetration (low risk), while the other argues for total diversification (high reward). They must use evidence of the firm's finances to support their case.
How do risk levels vary between market penetration and diversification?
Activity 03
Groups are given four different growth scenarios. They must rank them by risk and then present a 'risk mitigation' plan for the most dangerous option, explaining how the business can lower the chance of failure.
When is product development the most appropriate strategy?
A few notes on teaching this unit
Watch Out for These Misconceptions
Market development and market penetration are the same thing.
Penetration is selling more of the same to the same people. Development is finding new people (e.g., selling in a new country). Peer-teaching using local examples helps clarify this distinction.
Diversification is always a bad idea because it is high risk.
While risky, diversification can spread risk across different industries (conglomerate growth). Students need to see that for a firm in a dying industry, diversification might be the only way to survive.
Methods used in this brief