Year 12 IB Extended Essays 2018

Growth strategies and risk

The Ansoff’s matrix is a commonly used business tool which explores the growth potential of

a businesses’ market and product, and considers both the existing and new markets and

products. Ansoff’s matrix demonstrates four different methods of growth potential: market

penetration-where a business increases its market share by selling more of its existing product

in the same market, market development-where a business expands by looking for new

market segments or entirely new markets, product development-where a business focuses on

creating a new product for its current consumers, and diversification-where a business

introduces a new product into a new market (Oxford University Press, 2014, p.51). ! Figure 1 - Ansoff’s Matrix (Oxford College of Marketing, 2018.) ! ! ! ! ! ! ! ! ! ! ! When developing their social media marketing strategy, Red Bull’s aim was to pursue market

development to grow, primarily because they recognized that their product had the potential

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