Syllabus: AQA - AS and A Level Business
Module: 3.8 Choosing Strategic Direction (A-level Only)
Lesson: 3.8.1 Strategic Direction: Choosing Which Markets to Compete In and What Products to Offer

Introduction

This topic forms part of the AQA A-level Business specification (3.8.1), focused on strategic direction—how firms decide where to compete and what to offer. It’s a critical area of learning as it connects core business theory to the dynamic choices companies face in competitive markets. The topic encourages applied thinking, analytical evaluation, and decision-making under uncertainty—skills aligned with both AQA exam demands and the workplace readiness outcomes mapped by Enterprise Skills Ltd.

This content aligns closely with our Commercial Awareness and Decision-Making thematic areas, offering cross-curricular relevance and opportunities to embed Gatsby Benchmarks 4, 5, and 6 through real-world business applications.

Key Concepts

According to AQA’s specification, students must understand:

• Strategic Direction: The overall approach a business takes to achieve its goals.

• Market and Product Choices: Key decisions regarding the markets a firm competes in and the products it offers.

• Influencing Factors: Internal capabilities, competitive conditions, market trends, consumer preferences, and risk appetite.

• Ansoff Matrix:

  • Market Penetration – Selling existing products in existing markets.

  • Market Development – Entering new markets with existing products.

  • Product Development – Launching new products into existing markets.

  • Diversification – New products in new markets, often riskier but potentially rewarding.

• Evaluation Techniques: Use of strategic models (e.g. SWOT, risk matrices), financial and non-financial criteria.

This area demands both theoretical understanding and strategic evaluation skills—ideal for engaging students in real-world problem-solving.

Real-World Relevance

Strategic direction decisions are visible in every business headline. A few relevant examples:

• Apple continues its product development strategy with AI-powered devices and health features to differentiate from competitors.

• Netflix initially used market penetration, but pivoted to market development and product development by expanding globally and producing original content.

• LEGO successfully used product development to target adult consumers—creating new revenue streams while staying in its existing market.

• Tesla embraced diversification by entering solar power and insurance—broadening its strategic direction beyond automotive.

These decisions showcase risk-reward balances and reflect the real-world utility of the Ansoff Matrix as an analytical tool.

How It’s Assessed

In AQA A-level Business, this topic appears in Paper 3, where students respond to unseen case material in essay-style questions. Assessment features:

• Command Words:

  • Analyse: Break down complex information (e.g. using Ansoff Matrix).

  • Evaluate: Make judgements about strategic options with justification.

  • Recommend: Choose and justify the most suitable strategic direction.

• Typical Questions:

  • “Evaluate the usefulness of the Ansoff Matrix when choosing a strategic direction.”

  • “Recommend whether the business should pursue product development or diversification.”

• Assessment Objectives:

  • AO2: Application to real business context.

  • AO3: Analysis of issues and strategic tools.

  • AO4: Evaluation and supported judgement.

Assessment success depends on structured reasoning, real-world examples, and evaluative depth.

Enterprise Skills Integration

This topic develops commercial awareness and decision-making—two pillars of workplace readiness. Students engage in:

• Strategic Thinking: Evaluating market opportunities and product fit.

• Data-Led Decision-Making: Using tools like Ansoff and SWOT to justify options.

• Risk Assessment: Judging uncertainty and potential returns across options.

Our Skills Hub Futures sessions such as “Understanding Business Models” and “Data-Driven Decisions” can support this topic practically. These are ready-to-deliver and designed for zero prep time, helping teachers integrate active learning strategies validated by research.

Careers Links

This content aligns with several Gatsby Benchmarks:

• Benchmark 4: Connects strategic business content with career pathways in strategy, consulting, and product management.

• Benchmark 5: Can be enhanced with employer case studies or alumni discussing real strategic decisions.

• Benchmark 6: Use simulations or employer-set challenges (available via Skills Hub Futures) to replicate decision-making in workplace settings.

Relevant roles and sectors:

• Management consultancy

• Corporate strategy

• Product development

• Marketing and growth analysis

• Innovation and entrepreneurship

Students gain insight into high-value roles where commercial decision-making is essential.

Teaching Notes

Practical Delivery Suggestions:

• Case Study Approach: Use current examples (e.g. Dyson entering haircare, Amazon acquiring Whole Foods) to evaluate strategy.

• Ansoff Mapping Task: Provide four strategic options, ask students to place them on the Ansoff Matrix and justify risks/rewards.

• Debate Format: “Should [Company X] diversify or develop a new product?” Develops evaluation and persuasion skills.

Common Pitfalls:

• Over-simplification of the Ansoff Matrix—students must explore risk factors and synergy.

• Misapplying strategic tools to irrelevant data.

• Lack of real-world context in evaluation responses.

Extension Activities:

• Link with 3.7.1 (Mission and Objectives) and 3.8.2 (Strategic Positioning).

• Invite employer input through simulation judging or video interviews (see Employer Engagement Framework for ideas).