Growth & Ansoff Matrix

MAKING BUSINESS DECISIONS

Learning Objectives To understand and explain the Ansoff model for
strategic growth decisions To apply Ansoff matrix analysis to Toyota case study

GROWTH & ANSOFF MATRIX

Ansoff Matrix A tool that is used by businesses to identify which, of a number of options, a business could adopt to increase its sales. It is based on comparing the relative merits of selling existing products and new products in existing markets and new markets.

Definition:

Depending on the aims & objectives of the business, and the strategy it wants to adopt, Ansoff Matrix will suggest one of four options.

Learning Objectives
GROWTH & ANSOFF MATRIX

To understand and explain the Ansoff matrix for strategic growth decisions To apply Ansoff matrix analysis to Toyota case study

MARKET PENETRATION

The starting point

Requires relatively less investment Less risky

Why adopt this strategy?

If the market is growing sufficiently to enable the business to increase its
own sales; If the business has no other options but to keep going with its existing products; If direct competition is declining as businesses leave the market the gap they leave can be filled with existing products; If the business is a strong market leader it can force competition out of the market.

Learning Objectives
GROWTH & ANSOFF MATRIX

To understand and explain the Ansoff matrix for strategic growth decisions To apply Ansoff matrix analysis to Toyota case study

MARKET PENETRATION

Achieving market penetration

Market Penetration

Learning Objectives
GROWTH & ANSOFF MATRIX

To understand and explain the Ansoff matrix for strategic growth decisions To apply Ansoff matrix analysis to Toyota case study

MARKET DEVELOPMENT

Raising the risk level

Strategy is to seek new channels of distribution for the product or to sell it in different geographic areas.

Why adopt this strategy?

If the product or brand is so strong that it will readily & easily find
acceptance & sales in new markets; If existing markets have reached saturation; Market research identifies that new markets are emerging & there is a need for the existing product.

How can it be achieved?

Learning Objectives
GROWTH & ANSOFF MATRIX

To understand and explain the Ansoff matrix for strategic growth decisions To apply Ansoff matrix analysis to Toyota case study

PRODUCT DEVELOPMENT

New products into existing markets

To be successful: confident name is strong to get its customers to buy the products that it introduces; confident that new products will be as good as existing products confident that a market exists for the new products.

Why adopt this strategy?

If have strong distribution & understanding of customers, confident that
product carrying its brand name will be successful in existing markets; If it is trading in a market where there is not many products, limited choice; It has a wealth of new product ideas; If it has a niche marketing strategy; If it is operating in a market where the products have a very short life cycle.

Learning Objectives
GROWTH & ANSOFF MATRIX

To understand and explain the Ansoff matrix for strategic growth decisions To apply Ansoff matrix analysis to Toyota case study

PRODUCT DEVELOPMENT

Achieving product development

PRODUCT DEVELOPMENT

Learning Objectives
GROWTH & ANSOFF MATRIX

To understand and explain the Ansoff matrix for strategic growth decisions To apply Ansoff matrix analysis to Toyota case study

DIVERSIFICATION

The highest risk strategy of all

This is a strategy that has been pursued by many businesses.

Why adopt this strategy?

The product range & existing markets no longer offer any opportunity for
growth; When existing products or markets are declining; Opportunities for diversification are worth the risk; To spread risk does not want to keep all of its eggs in one basket; Able to equally apply success to different products in different markets

How can we increase the chances of success?

Learning Objectives
GROWTH & ANSOFF MATRIX

To understand and explain the Ansoff matrix for strategic growth decisions To apply Ansoff matrix analysis to Toyota case study

ANSOFF MATRIX
Draw the Ansoff Matrix for Toyota and suggest specific strategies they could use to achieve all 4 options for growth.

10 minutes

Learning Objectives
GROWTH & ANSOFF MATRIX

To understand and explain the Ansoff matrix for strategic growth decisions To apply Ansoff matrix analysis to Toyota case study

Ansoffs Matrix can be applied to Toyota, giving the business a number of different strategic options
Existing Products Existing Markets
Market Penetration
Expand organically and make cars more fun Expand by acquisition of a competitor

New Products
Product Development

Develop more hybrid and eco friendly cars

New Markets

Market Development

Diversification

Expand overseas (Asia)

Develop smart communities