Ansoff Matrix

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Ansoff Matrix
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Group Detail

• Group C
• Ahmed Najeeb (MM103014)
• Tabassum Riaz (MM103034)
• Sufyan Saeed (MM103053)
• Mustajab Khan (MM103075)

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Introduction

• Igor Ansoff created the Product / Market diagram
  in 1957 as a method to classify options for
  business expansion. The simplicity of this model
  is that the four strategic options defined can be
  generically applied to any industry.
• This well known marketing tool was first
  published in the Harvard Business Review (1957)
  in an article called Strategies for
  Diversification. It was consequently published
  in Ansoffs book on Corporate Strategy in 1965.

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About the Ansoff Matrix

• It is used by marketers who have objectives for
  growth. Igor Ansoffs matrix offers strategic
  choices to achieve the objectives. There are four
  main categories for selection.
• Market Penetration
• Market Development
• Product Development
• Business Diversification

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Variables in the matrix

• Two variables in Strategic marketing
• Decisions
• 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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Variables in the matrix

• In terms of the product, the two options are
• selling existing products
• developing new ones

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Ansoff Matrix
PRODUCT DEVELOPMENT Sell new products in
existing markets
MARKET EXTENSION Achieve higher sales/market
share of existing products in new markets
Diversification New Products in New Market
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Improving the performance of existing businesses

• Improving the performance of existing businesses
• Do Nothing if the environment is static
  (short-run only)
• Withdraw when there is an irreversible decline
  in demand or opportunity costs of staying in a
  market are too high
• Consolidation means concentration of resources
  and focusing on existing competitive advantages
• Penetration means gaining market share

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MARKET PENETRATION
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MARKET PENETRATION

• Here we market our existing products to our
  existing customers
• 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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objectives

• Maintain or increase the market share of current
  products
• Secure dominance of growth markets
• Restructure a mature market by driving out
  competitors
• Increase usage by existing customers. For example
  by introducing loyalty schemes.

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Strategies

• Penetration Pricing
• Bundling
• Aggressive campaign

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Market Development
MARKET EXTENSION Achieve higher sales/market
share of existing products in new markets
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Market Development

• Here we market our existing product range in a
  new market
• Example Gourmet now Expand its business in
  different cities( Faisalabad, Multan . etc) of
  Pakistan but initially it was only in Lahore
• Objective
• Increase Numbers of Customers

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Strategies

• New geographical markets
• New product dimensions or packaging
• For Example
• New distribution channels
• Different pricing policies to attract different
  customers or create new market segments

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Product Development
PRODUCT DEVELOPMENT Sell new products in existing
markets
MARKET EXTENSION Achieve higher sales/market
share of existing products in new markets
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Product Development

• This is a new product to be marketed to our
  existing customers
• (existing markets, new products)
• Least risky of all four strategies
• 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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Product Development

• Objective
• To Increase Number of Products
• Strategies
• Increase Product Line
• Product Line Stretching (Both Horizontally
  Vertically)

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Diversification
PRODUCT DEVELOPMENT Sell new products in existing
markets
MARKET EXTENSION Achieve higher sales/market
share of existing products in new markets
DIVERSIFICATION Sell new products in new markets
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Diversification

• (new markets, new products)
• This is a new product to be marketed to our
  existing customers
• Objective
• Increase New Products and New Market
• Types
• Related Diversification
• Un related Diversification

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Diversification

• Diversification is Further Grouped into
• Lateral Diversification
• Horizontal Diversification
• Vertical Diversification

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Strategies

• Globalization/Geographical Expansion
• Attacking New Segments With New Products
• Acquiring Weak Competitors To Gain New Customers
  Segment

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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

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Using Ansoff Matrix

• Analysis and Planning to meet Customers Needs
  and Expectations.

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Thank For Listening