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Ansoff matrix

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Ansoff matrix

  1. 1. Ansoff Matrix 2880 Strategy Yr 13
  2. 2. Background <ul><li>Long-term business strategy is dependant on planning for their introduction </li></ul><ul><li>Ansoff Matrix represents the different options open to a marketing manager when considering new opportunities for sales growth </li></ul>
  3. 3. Variables in the matrix <ul><li>Two variables in Strategic marketing </li></ul><ul><li>Decisions: </li></ul><ul><ul><li>The market in which the firm was going to operate </li></ul></ul><ul><ul><li>The product intended for sale </li></ul></ul><ul><ul><li>In terms of the market, managers had two options: </li></ul></ul><ul><ul><li>Remain in the existing market </li></ul></ul><ul><ul><li>Enter new ones </li></ul></ul>
  4. 4. <ul><li>In terms of the product, the two options are: </li></ul><ul><ul><li>selling existing products </li></ul></ul><ul><ul><li>developing new ones </li></ul></ul>
  5. 5. 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 Existing PRODUCTS New INCREASING RISK INCREASING RISK Existing MARKETS New MARKET PENETRATION Sell more in existing Markets
  6. 6. Existing PRODUCTS New INCREASING RISK INCREASING RISK Existing MARKETS New MARKET PENETRATION Sell more in existing Markets
  7. 7. MARKET PENETRATION <ul><li>This is the objective of higher market share in existing markets </li></ul><ul><ul><li>E.g. in 2000, Mitsubishi announced a 10% reduction in prices in the UK in order to encourage purchases </li></ul></ul>
  8. 8. MARKET EXTENSION Achieve higher sales/market share of existing products in new markets Existing PRODUCTS New INCREASING RISK INCREASING RISK Existing MARKETS New MARKET PENETRATION Sell more in existing Markets
  9. 9. MARKET EXTENSION <ul><li>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 </li></ul><ul><ul><li>Nintendo are making hand held games consoles (e.g. DS) appeal to the adult/grey market by introducing games such as Brain Train </li></ul></ul>
  10. 10. MARKET EXTENSION Achieve higher sales/market share of existing products in new markets PRODUCT DEVELOPMENT Sell new products in existing markets Existing PRODUCTS New INCREASING RISK INCREASING RISK Existing MARKETS New MARKET PENETRATION Sell more in existing Markets
  11. 11. PRODUCT DEVELOPMENT <ul><li>Least risky of all four strategies </li></ul><ul><li>This involves taking an existing product and developing it in existing markets </li></ul><ul><ul><li>E.g. Coca-Cola. This has been developed to have vanilla, lime, cherry and diet varieties (amongst others) in the SOFT DRINKS market </li></ul></ul>
  12. 12. 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 Existing PRODUCTS New INCREASING RISK INCREASING RISK Existing MARKETS New MARKET PENETRATION Sell more in existing Markets
  13. 13. DIVERSIFICATION <ul><li>This is the process of selling different, unrelated goods or services in unrelated markets </li></ul><ul><li>This is the most risky of all four strategies </li></ul><ul><ul><li>E.g. the Virgin group </li></ul></ul>
  14. 14. Summary <ul><li>Risks involved differ substantially </li></ul><ul><li>The matrix identifies different strategic areas in which a business COULD expand </li></ul><ul><li>Managers need to then asses the costs, potential gains and risks associated with the other options </li></ul>

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