Ansoff Matrix Strategy

Growth & Ansoff Matrix

Learning Objectives To understand and explain the Ansoff model for

strategic growth decisions To apply Ansoff matrix analysis to Toyota case study

MAKING BUSINESS DECISIONS

Learning Objectives To understand and explain the Ansoff matrix for

strategic growth decisions To apply Ansoff matrix analysis to Toyota case

study

GROWTH & ANSOFF MATRIX


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

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:



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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.



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MARKET PENETRATION

Market Penetration

Achieving market penetration



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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?



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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.



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PRODUCT DEVELOPMENT

PRODUCTDEVELOPMENT

Achieving product development



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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?

ANSOFF MATRIX

10 minutes

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



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Ansoff’s Matrix can be applied to Toyota, giving the business a number of different strategic options

Existing Products New Products

Exi

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ew M

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MarketPenetration

ProductDevelopment

MarketDevelopment

Diversification

Expand organically and make cars more fun

Expand overseas (Asia)

Develop more hybrid and eco friendly cars

Develop “smart communities”

Expand by acquisition of a competitor

Ansoff Matrix Strategy

Documents

Transcript of Ansoff Matrix Strategy