Strategy - Ansoffs Matrix

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Ansoff's Matrix is a classic model of marketing and business strategy that business students can use very effectively in their exams. This revision presentation outlines the key features of the model.

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Strategy - Ansoffs Matrix

  1. 1. Ansoff’sMatrix
  2. 2. Ansoff MatrixA marketing planning model that helps abusiness determine its product and market strategy
  3. 3. Ansoff Matrix – the Grid
  4. 4. How does the Ansoff Matrix work?• Ansoff’s matrix suggests that a business’ growth strategy depends on whether it markets new or existing products in new or existing markets• The output from the matrix is a series of four suggested growth strategies which set the direction for the business strategy
  5. 5. Ansoff is Everywhere!
  6. 6. Market penetration – main aims• Maintain or increase the market share of current products• Secure dominance of growth markets Business• Restructure a mature as market by driving out competitors usual• Increase usage by existing customers
  7. 7. Evaluating market penetration• The business is focusing on markets and products it knows well• It is likely to have good information on competitors and on customer needs• Unlikely to need significant new market research• But will the strategy deliver enable the firm to achieve its growth objectives?
  8. 8. Product developmentA growth strategy where growth a business aims to a business tointroduce new productsintroduce new products into existing markets into existing markets
  9. 9. Evaluating product development• A strategy that often plays to the strengths of an established business• Strong emphasis on effective market research (insights into customer needs) and successful innovation• A great way of exploiting the existing customer base• Being first to market is important
  10. 10. Market development A growth strategy where the business seeks to sell itsexisting products into new markets
  11. 11. Different approaches to market development• New geographical markets; e.g. exporting• New product dimensions or packaging (e.g. sizes, flavours, features)• New distribution channels (e.g. using e- commerce and mail order)• Different pricing policies to attract different customers
  12. 12. Evaluating market development• Often more risky than product development• Existing products may not suite new markets (exporting often problematic)• A logical strategy where existing markets are saturated or in decline• Significant government support for this strategy – particularly keen to encourage international trade
  13. 13. Diversification The growth strategy The growth strategy where a business where a businessmarkets new products inmarkets new products in new markets new markets
  14. 14. Evaluating diversification• Inherently risky strategy – No direct experience of the product or market – Few economies of scale (initially) – However, if successful, overall risk of the business is spread• Approaches – Innovation & R&D: develop new solutions – Acquire an existing business in the market – Extend an existing brand into the market
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