H. Igor Ansoff Ansoff was a mathematician and a business manager.

Father of Strategic management Born in Vladivostok, Russia on December 12, 1918

What is the Ansoff Matrix?

Assists organizations to map strategic product market growth Widely attributed to the great man.

Other factors- Condition of the market

Competition levels and amount of resources

Two variables in Strategic marketing Decisions:

The market in which the firm was going to operate The product intended for sale MARKET 1. Remain in existing market products 2. Enter new ones ones PRODUCT Selling existing Developing new

Existing Existing

PRODUCTS

New

MARKET PENETRATION Sell more in existing Markets

INCREASING RISK PRODUCT DEVELOPMENT

INCREASING RISK

Sell new products in existing markets

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

New

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

Existing Existing

PRODUCTS

New

MARKET PENETRATION Sell more in existing Markets

INCREASING RISK

INCREASING RISK

MARKETS

New

Strategy of selling an existing product to new markets. Involves 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

Existing Existing

PRODUCTS

New

MARKET PENETRATION Sell more in existing Markets

INCREASING RISK

INCREASING RISK

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

New

Least risky of all four strategies 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

Existing Existing

PRODUCTS

New

MARKET PENETRATION Sell more in existing Markets

INCREASING RISK PRODUCT DEVELOPMENT

INCREASING RISK

Sell new products in existing markets

MARKETS

deveploment

New

Achieve higher sales/market share of existing products in new markets

Process of selling different, unrelated goods or services in unrelated markets Most risky among all four.
Credibility focus( why company enters market with new product) E.g. the Virgin group

Existing Existing

PRODUCTS

New

MARKET PENETRATION Sell more in existing Markets

INCREASING RISK PRODUCT DEVELOPMENT

INCREASING RISK

Sell new products in existing markets

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

New

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

Ansoff Matrix can result in an overuse of analysis In fact, Ansoff himself thought about this and it was he who first mentioned the now famous phrase "paralysis by analysis"

MARKET PENTRATIONIntroduce in 1982 as result of growing trend towards dieting and healthier leaving

DIET COKE

Research showed COCO COLA that a smaller version of the 2 liter family size bottle would sell well to household containing 1-2 people.

COCO COLA SHARE SIZE 1.5 L BOTTLE

COCO COLA VANILLA Successful in AMERICA , COCO COLA launched it in GREAT BRITAIN by carrying out taste test

COCO COLA VANILLA

POWERADE COCO COLA then developed the energy drink POWERADE in response to growth in the sports drink market

POWERADE