ACCA Strategic Professional · Strategic Business Leader · Strategic choices

Verano Tech makes enterprise accounting software for large banks. It has just developed a cloud-based payroll module and intends to sell it only to its current bank customers, who already trust its brand. Which Ansoff strategy is Verano following, and what is the key implication?

This is product development: a new payroll module sold to existing bank customers. The main risk is whether Verano has the technical and development capability to deliver a product that current customers will accept, since the market itself is already well known to it.

1. AMarket penetration, so risk is low because nothing about the offering is new
2. BProduct development, so the main risk lies in the capability to create and deliver the new productCorrect
3. CRelated diversification, so the firm must acquire new market knowledge
4. DMarket development, so the firm must find new customer segments