IBDP Business Management Case Study Practice Test

The question tests understanding of the Ansoff matrix and which growth paths it includes. In Ansoff, growth options are shown by whether the product is existing or new and whether the market is existing or new. Product development and market development fit this framework because they are both growth paths: product development means introducing new products to current customers, while market development means selling existing products in new markets. So choosing these two indicates ABC intends to grow by expanding its product line and by expanding into new markets. Other options mix strategies that aren’t both growth paths in the Ansoff matrix (for example, market penetration uses existing products in existing markets, and diversification would be new products in new markets), and some items fall outside Ansoff, like vertical integration or outsourcing and cost leadership.