Making strategic choices is by far one of the most important tasks for strategic

managers. Porter (1996, p.70) stated that The essence of strategy is choosing what not
to do. Once understanding the business environment, managers need to choose
whether their firm should stay in its current industry or exit. Above all, managers need to
choose which strategy their company should follow to grow business and effectively
compete in the market. Through offering their models, scholars have given managers
tools to do so. Using the 2x2 Product Market matrix, Ansoff (1957) created a fourquadrant set of options for business growth including Product Penetration, Market
Development, Product Development and Diversification. Risk increases as strategic
choice moves from the first to the latters. If Product Penetration is a strategy which
companies stay focus on their current product and market and try to gain the largest
possible market share, Product Development and Market Development are alternatively
the strategies of the companies changing their focus either on a new product launching
or a new market segment. Turning to Diversification, companies have a whole different
strategy of new product in new market. General Electric Company (GE) might be a
classic example of combining all those four strategies into one corporation. In parallel
with exploiting its core business of manufacturing electricity appliances, GE also
enlarged its business portfolio into various new markets (aircraft engines, power
systems, financial services) by conducting a number of acquisition deals (Grant, 2008).
So far, from what has been drawn out of the above analysis, strategic choices are made
following Michael Porters Generic Strategies and/or Sir. Igor Ansoff Matrix, which is
sometimes termed as environmental determinism, regulates companies as entities
forced by their industry, they are supposed to compete to each other to survive and
make profit. However, from their research, W. Chan Kim and Renee Mauborgne (2004)
have showed their opinions in a whole different side, which they call constructionist
view. Accordingly, one firm can successfully and effectively compete without having to
actually compete with any of its competitors by challenging the conventionally and
previously formed market boundaries.
By characterising new and unexploited markets as Blue Ocean and existing markets as
Red Ocean,
S.Choice Summary: whether it is "diversification" or "blue ocean creation", whether it
is to outsource to external supplier manufacture or to spend on internal R&D and turn
the findings into firms core competencies afterwards, what matters the most to firms is
to stay long and prospered in its business. --> Hence, what matters is to effectively point
out which choice is the most suitable and potentially successful for firm to make and
execute consistently upon.