ACCA Strategic Professional · Strategic Business Leader · Strategic choices
Kestrel Software sells accounting software to small businesses in Kenya. It now plans to sell the same software, unchanged apart from language translation, to small businesses in Tanzania and Uganda. Which Ansoff strategy is this, and what is the main implication?
This is market development: the existing software is being taken to new national markets with only minor adaptation. The main implication is increased risk from limited knowledge of customers, regulation and distribution in Tanzania and Uganda, rather than product risk.
- AMarket development; risk rises because the firm lacks knowledge of the new marketsCorrect
- BMarket penetration; risk is minimal because the markets are similar
- CProduct development; the main need is new R&D capability
- DDiversification; risk is highest because both product and market are new
Explanation
Existing product to new geographic markets is market development. Minor translation does not make it a new product. The main risk is unfamiliarity with customers, regulation and distribution in the new countries, not R&D.
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