ansoff matrix
TRANSCRIPT
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Ansoff MatrixAnsoff MatrixAnsoff MatrixAnsoff Matrix
2880 Strategy Yr 132880 Strategy Yr 13
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Background• Long-term business strategy is
dependant on planning for their introduction
• Ansoff Matrix represents the different options open to a marketing manager when considering new opportunities for sales growth
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Variables in the matrix
Two variables in Strategic marketingDecisions:
– The market in which the firm was going to operate
– The product intended for sale
In terms of the market, managers had two options:
– Remain in the existing market– Enter new ones
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In terms of the product, the two options are:
– selling existing products– developing new ones
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Existing PRODUCTS New
INCREASING RISK
INC
REA
SIN
G R
ISK
Existing
MARKETS
New
MARKET PENETRATION
Sell more in existing Markets
MARKET EXTENSION
Achieve higher sales/market share of existing products in new markets
PRODUCT DEVELOPMENT
Sell new products in existing markets
DIVERSIFICATION
Sell new products in new markets
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Existing PRODUCTS New
INCREASING RISKIN
CR
EA
SIN
G R
ISK
Existing
MARKETS
New
MARKET PENETRATION
Sell more in existing Markets
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MARKET PENETRATION• This is the objective of higher
market share in existing markets
– E.g. in 2000, Mitsubishi announced a 10% reduction in prices in the UK in order to encourage purchases
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Existing PRODUCTS New
INCREASING RISKIN
CR
EA
SIN
G R
ISK
Existing
MARKETS
New
MARKET PENETRATION
Sell more in existing Markets
MARKET EXTENSION
Achieve higher sales/market share of existing products in new markets
![Page 9: Ansoff matrix](https://reader038.vdocument.in/reader038/viewer/2022100507/557c22d1d8b42a925b8b4bbe/html5/thumbnails/9.jpg)
MARKET EXTENSION• This is the strategy of selling an existing
product to new markets. This could involve selling to an overseas market, or a new market segment
– Nintendo are making hand held games consoles (e.g. DS) appeal to the adult/grey market by introducing games such as Brain Train
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Existing PRODUCTS New
INCREASING RISK
INC
REA
SIN
G R
ISK
Existing
MARKETS
New
MARKET PENETRATION
Sell more in existing Markets
MARKET EXTENSION
Achieve higher sales/market share of existing products in new markets
PRODUCT DEVELOPMENT
Sell new products in existing markets
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PRODUCT DEVELOPMENT
• Least risky of all four strategies• This involves taking an existing
product and developing it in existing markets– E.g. Coca-Cola. This has been
developed to have vanilla, lime, cherry and diet varieties (amongst others) in the SOFT DRINKS market
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Existing PRODUCTS New
INCREASING RISK
INC
REA
SIN
G R
ISK
Existing
MARKETS
New
MARKET PENETRATION
Sell more in existing Markets
MARKET EXTENSION
Achieve higher sales/market share of existing products in new markets
PRODUCT DEVELOPMENT
Sell new products in existing markets
DIVERSIFICATION
Sell new products in new markets
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DIVERSIFICATION• This is the process of selling
different, unrelated goods or services in unrelated markets
• This is the most risky of all four strategies
– E.g. the Virgin group
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Summary• Risks involved differ substantially• The matrix identifies different
strategic areas in which a business COULD expand
• Managers need to then asses the costs, potential gains and risks associated with the other options