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Ansoff Matrix

Ansoff Matrix. Group Detail. Group “C” Ahmed Najeeb (MM103014) Tabassum Riaz (MM103034) Sufyan Saeed (MM103053) Mustajab Khan (MM103075). Introduction.

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Ansoff Matrix

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  1. Ansoff Matrix

  2. Group Detail Group “C” Ahmed Najeeb (MM103014) Tabassum Riaz (MM103034) Sufyan Saeed (MM103053) Mustajab Khan (MM103075)

  3. 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 Ansoff’s book on “Corporate Strategy” in 1965.

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

  5. 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

  6. Variables in the matrix In terms of the product, the two options are: • selling existing products • developing new ones

  7. Existing PRODUCTS New INCREASING RISK Existing MARKETS New MARKET PENETRATION Sell more in existing Markets INCREASING RISK 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

  8. 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

  9. Existing PRODUCTS New INCREASING RISK Existing MARKETS New MARKET PENETRATION Sell more in existing Markets INCREASING RISK MARKET PENETRATION

  10. 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

  11. 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.

  12. Strategies Penetration Pricing Bundling Aggressive campaign

  13. Existing PRODUCTS New INCREASING RISK Existing MARKETS New MARKET PENETRATION Sell more in existing Markets INCREASING RISK Market Development MARKET EXTENSION Achieve higher sales/market share of existing products in new markets

  14. 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”

  15. 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

  16. Existing PRODUCTS New INCREASING RISK Existing MARKETS New MARKET PENETRATION Sell more in existing Markets INCREASING RISK Product Development PRODUCT DEVELOPMENT Sell new products in existing markets MARKET EXTENSION Achieve higher sales/market share of existing products in new markets

  17. 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

  18. Product Development Objective To Increase Number of Products Strategies Increase Product Line Product Line Stretching (Both Horizontally & Vertically)

  19. Existing PRODUCTS New INCREASING RISK Existing MARKETS New MARKET PENETRATION Sell more in existing Markets INCREASING RISK 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

  20. 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

  21. Diversification Diversification is Further Grouped into Lateral Diversification Horizontal Diversification Vertical Diversification

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

  23. 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

  24. Using Ansoff Matrix “Analysis and Planning to meet Customers Needs and Expectations”.

  25. Thank For Listening

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