2.1.2 Ansoff Matrix
The Ansoff Matrix is a model for analysing the approach to product-market growth strategies. It is developed by H Ignor Ansoff in 1965 and well defined in his book "Corporate Strategy". According to H Ignor Ansoff the matrix is a business analysis methodology that links an organization's marketing strategy with its ongoing strategic direction. It provides framework to identify growth opportunities.
The Matrix presents four alternative growth strategies in the form of 2X2 table. One dimension of the matrix considers "Products" (existing and new) and the other dimension considers "Markets" (existing and new). (FME, 2013).
Product, businesses are built around products and services that define their value offering. Most …show more content…
Hood, P. 2004 in their book “The Power of the 2x2 Matrix” states that this is the de facto strategy: change nothing and sell more of the same to existing customers. Organization mostly considers this strategy because it has the lowest risk and the possibility of higher market gain. Market Penetration focuses on four main approaches.
1. Maintain or increase the current product’s market share: This can be achieved by aggressive marketing and sales promotion for the existing products, provide competitive yet attractive pricing or discount offers. Do more customer centric research and focused actions so that it builds the market share which might lead to winning customers from competitors in the existing market.
2. Secure dominance of growth markets by finding new demographics for the product.
3. Restructure a mature market by driving out competitors: When the market is mature there is no more sectors left to exploit than to get the market share from the competitors. This can be achieved by making the market unattractive via extensive promotional campaign and very alluring pricing strategies.
4. Increase usage by existing customers: This can be achieved via loyalty schemes, adding value or improving the products.
The market penetration marketing strategy relies mainly on how well company knows its market, competitor activities and its …show more content…
Right balance of risk vs rewards
Diversification can occur at two levels: either at the business unit level or at an organization level. When it happens at the business unit level the organization expands into a new segment of its current market. When it happens at the organizational level, integration of new organization into the existing one happens. (FME, 2013)
There are three approaches to implement the policy of diversification: - Full Diversification
In this approach an organization offers very new product to an unknown market. This approach is risky and time consuming.
- Backward Diversification
In this approach an organization offers product that is preceding version of the current product.
- Forward Diversification
In this approach an organization offers product that is advanced version of the current product.
Why Ansoff Matrix is selected?
The Ansoff matrix four strategies and framework fits very well for detailed analysis of thesis research objectives. Strategies shall be improved to form the key indicator matrix which case company can use to leverage mobile wireless legacy product line in a competitive market and gain exponential growth.
Important advantages of the Matrix are as
The Ansoff Matrix is a model for analysing the approach to product-market growth strategies. It is developed by H Ignor Ansoff in 1965 and well defined in his book "Corporate Strategy". According to H Ignor Ansoff the matrix is a business analysis methodology that links an organization's marketing strategy with its ongoing strategic direction. It provides framework to identify growth opportunities.
The Matrix presents four alternative growth strategies in the form of 2X2 table. One dimension of the matrix considers "Products" (existing and new) and the other dimension considers "Markets" (existing and new). (FME, 2013).
Product, businesses are built around products and services that define their value offering. Most …show more content…
Hood, P. 2004 in their book “The Power of the 2x2 Matrix” states that this is the de facto strategy: change nothing and sell more of the same to existing customers. Organization mostly considers this strategy because it has the lowest risk and the possibility of higher market gain. Market Penetration focuses on four main approaches.
1. Maintain or increase the current product’s market share: This can be achieved by aggressive marketing and sales promotion for the existing products, provide competitive yet attractive pricing or discount offers. Do more customer centric research and focused actions so that it builds the market share which might lead to winning customers from competitors in the existing market.
2. Secure dominance of growth markets by finding new demographics for the product.
3. Restructure a mature market by driving out competitors: When the market is mature there is no more sectors left to exploit than to get the market share from the competitors. This can be achieved by making the market unattractive via extensive promotional campaign and very alluring pricing strategies.
4. Increase usage by existing customers: This can be achieved via loyalty schemes, adding value or improving the products.
The market penetration marketing strategy relies mainly on how well company knows its market, competitor activities and its …show more content…
Right balance of risk vs rewards
Diversification can occur at two levels: either at the business unit level or at an organization level. When it happens at the business unit level the organization expands into a new segment of its current market. When it happens at the organizational level, integration of new organization into the existing one happens. (FME, 2013)
There are three approaches to implement the policy of diversification: - Full Diversification
In this approach an organization offers very new product to an unknown market. This approach is risky and time consuming.
- Backward Diversification
In this approach an organization offers product that is preceding version of the current product.
- Forward Diversification
In this approach an organization offers product that is advanced version of the current product.
Why Ansoff Matrix is selected?
The Ansoff matrix four strategies and framework fits very well for detailed analysis of thesis research objectives. Strategies shall be improved to form the key indicator matrix which case company can use to leverage mobile wireless legacy product line in a competitive market and gain exponential growth.
Important advantages of the Matrix are as