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Ansoff's Product Market Expansion Grid


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This slide includes Growth Strategies which includes Ansoff Product-Market Expansion Grid.

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Ansoff's Product Market Expansion Grid

  2. 2. Growth Strategies
  3. 3. CONTENTS  Definition- Growth Strategy  Ansoff’s Product Market Expansion Grid  Market Penetration  Market Development  Product Development  Diversification  Case Studies: 1)McDonalds 2) Amul
  4. 4. Definition GROWTH STRATEGY - An organization substantially broadens the scope of one or more of its business in terms of their respective customer group, customer functions and alternative technologies to improve its overall performance.
  5. 5. Market Penetration  Increase sales through effective marketing strategies within the current target market 1. To maintain or grow the market share of the current product range 2. Become the dominant player in the growth markets 3. Drive out competitors 4. Increase the usage of a company's products by its current customers
  6. 6. Market Development  Expand sales in new markets through expanding geographic representation  An organization's current product can be changed improved and marketed to the existing market.  The product can also be targeted to anther customer segment. Either way, both strategies can lead to additional earnings for the business.
  7. 7. Product Development  Increase sales through new products/services  An organization that already has a market for its products might try and follow a strategy of developing additional products, aimed at it's current market.  Even if the new products are need not be new to the market, they remain new to the business.
  8. 8. Diversification  Diversification Strategy is the development of new products in the new market. Diversification strategy is adopted by the company if the current market is saturated due to which revenues and profits are lower.
  9. 9. MISSION AND VISION MISSION Promote Diversity and Inclusion among our Employees, Owner/Operator's and Suppliers who represent the diverse populations McDonald's serves around the globe. VISION The McDonald's System leverages the unique talents, strengths and assets of our diversity around the globe in order to be our customers' favourite place and way to eat.
  10. 10. SEGMENTATION  Geographically-segmented :Islandwide  Tampines, Woodlands, Clementi, Orchard, NTU…  McCafes – 22 outlets islandwide  Demographic Segmentation  Kids, Family, Students  Psychographic Segmentation  Convenience and Lifestyle  Behavioral Segmentation  Occasions, e.g. birthday parties
  11. 11. TARGET MARKET  Kids - 3 to 7 years  (Happy Meal (healthier choice) with free toys)  Families - Weekend outings or meals  (Drive-Thru, Takeaways, McDelivery, Happy Meal)  Students - Primary, Secondary, JC, Poly, Uni (a place to hang out or study)  (Student Meals, outlets at SP, NYP, NUS and NTU, 24-Hour)  Café goers - for quieter ambience, a place to relax or read or even business entertainments  (McCafe)  Working Adults - seek convenience meals; “grab and go”  (Drive-Thru, Takeaways, McDelivery, 24-Hour)
  12. 12. PRODUCT LINE
  13. 13. GRID MATRIX EXISTING PRODUCTS NEW PRODUCTS EXISTING MARKET Market Penetration hamburgers, cheeseburgers, chicken products, French fries, breakfast items, soft drinks, milkshakes and desserts. More recently, it has begun to offer salads, wraps and fruit. Product Development Innovation in all products, Introduction of new products (Brands) NEW MARKET Market Development Uruguay Venezuela Yemen Diversification Pret A Manger Chipotle Mexican Grill
  14. 14. MARKET PENETRATION  McDonald is one of the most famous brands for providing innovations but even in this ever changing and innovative era it keeps its products same in the same market but this happen for a very short span of time (Even maximum a month). The results of firm's existing resources and capabilities remain secure and the firm increases market share if competitors reach capacity limits.
  15. 15. MARKET DEVELOPMENT  McDonald’s Corporation has always provided new and new innovations to its customers. It always has provided a handsome level of consumer economic surplus to its customers. McDonald’s always seeks innovation from one market and provided these innovations and new products to the rest of the world. This strategy does have a minimal level of risk which almost always have provided good results to the organization for keeping the strength in its 47 million customers averaged daily existing customers.
  16. 16. PRODUCT DEVELOPMENT  As we all know that McDonald's is a Global organization and it has the franchisee FDI system to reach the new global markets of work in its international business. It has more than 31,000 business outlets (franchisees) in 119 countries round the world and it always pursuit the additional market segments on geographical basis. As the firm is expanding into new markets; the market development strategy typically has more risk than a market penetration strategy for McDonald’s but the developments of new markets have been proven significantly successful for McDonald’s core competencies of its experience with a specific market segment.
  17. 17. DIVERSIFICATION  Diversification is not the best of the idea for the company because it can’t afford to make new products in the new markets. It’s actually not possible with the franchisee system that McDonald’s adopts. Keeping aside from Franchisee system McDonald has also proved success in this strategy by owning a majority stake in Chipotle Mexican Grill & Pert A Manger and acquiring Donatos Pizza. McDonald’s adopted both product and market development strategies which was outside the core competencies of the firm.
  18. 18. MISSION AND VISION MISSION To satisfy the nutritional requirements of its customers. VISION To provide more and more satisfaction to the farmers, employees and the distributors.
  19. 19. Product Line
  20. 20. Market Penetration Strategy • Amul is set to build up 10,000 `Amul Parlours' across the country during the year. These stores will sell the entire product range of Amul products, in addition to the existing retail network for ice cream, milk and other products. • It is trying to get more and more customers through a more intensive distribution. It is opening more stores at Highways, Railway stations, Airports, Bus stations, Schools, Colleges, and Industrial Canteens etc. • It is trying to find place in various retail outlets, the latest story being Amul trying to acquire a shelf in the yet to come Wal-Mart. • Opening small Amul-exclusive stores in each and every neighborhood to reach to the very near of the consumer.
  21. 21. Market Development Strategy • Amul is now shifting its focus from urban to rural markets and smaller towns. In 2005 Amul added 900 new stores all across small towns to increase its reach. • Amul is capturing the market of diabetic and health conscious people through sugar free ice-cream, which is a variation of an existing product. • Amul will expand its fresh milk markets to Kanpur and Lucknow and other smaller towns this year, thereby increasing its market base for the existing products. • Amul is also increasing its market base for milk through a new version – the Amul Tazaa. Tazaa is the long-life version of milk which has a longer shelf life as compared to normal fresh milk. This product is highly picking up in the domestic and export market.
  22. 22. Product Development Strategy • Amul-Cool (milk based cool drink) and Amul-Kool café – these are the products aimed at the youth of the country with synonymous marketing campaigns. • It is coming up with a chain of pizza corners. This chain would consist of around 2000 stores all over India. • Stamina – the instant energy whey based sport drink has been launched to provide its customers with a totally new product. • Amul has recently launched a new variation of ice-cream, the sundae swirl to its existing base of ice-cream customers. • Amul-Masti, the packaged buttermilk is aimed to be another non- carbonated cool drink in the Amul Cool range which is not only aimed at the youth but also at the more mature chunk of the society.
  23. 23. Diversification Strategy  Diversification is a very important part for any business organization. For the further growth opportunities of a company diversification is required. When a new product is launched into the new market diversification holds good and provides more growth opportunities in the future. Diversification is a high- risk strategy as it involves taking a step into a territory where the parameters are unknown to the company. Amul has identified the need to increase its presence in newer markets and thus have come up with many new such strategies for increasing its presence in the entire market.
  25. 25. ADVANTAGES…  It forces market planners and management to think about the expected risks of moving in a certain direction  It lays out possible strategies for growth  Discipline: it focuses the business  Sets out aims and objectives  Presentable to stakeholders  Assessment of alternatives- shows opportunity cost  Creates a risk aware culture  Indicates level of risk and relevant risk
  26. 26. DISADVANTAGES…  Fails to show that market development and diversification strategies require a change to every day running of the business  Only a theoretical model  Does not take into account the activities of external competitors  Paralysis by analysis  Plans too optimistic e.g. transferrable skills  Accurate predictions are difficult- unforeseen events  Conflicting objectives of stakeholders