Business

Question

According to the Ansoff Growth Matrix, the strategic option of A.) Market Penetration. B.) Product Development. C.) Diversification. is the riskiest for a business to pursue. A business would use a A.) Horizontal Diversification. B.) Conglomerate Diversification. C.) Concentric Diversification. strategy if it decides to launch new products in new markets.

2 Answer

  • 1/ C. Diversification is the riskiest strategic option.

    2/ B. Conglomerate Diversification.
  • Answer:

    According to the Ansoff Growth Matrix, the strategic option of C) DIVERSIFICATION is the riskiest for a business to pursue.

    A business would use a B) CONGLOMERATE DIVERSIFICATION strategy if it decides to launch new products in new markets.

    Explanation:

    Diversification carries a higher risk because it involves selling new products or services in new markets. It does have an advantage though, if one business unit performs poorly, it will not necessarily affect the other business unit which might perform very well.

    A conglomerate diversification strategy is useful when a corporation wants to start selling new products in new markets. The most common way of carrying out a conglomerate diversification strategy is through mergers and acquisitions (M&A).

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