Ansoffs matrix

• What is the Ansoff matrix?

  a marketing planning model that helps a business determine its product and market growth strategy
• What are the four sections of the ansoff matrix?

  market penetration

  market development

  product development

  diversification
• What are the negatives of a business using market penetration?

  market could be saturated so growth is hard

  self canibalistation
• what is market penetration?

  Increasing market share by selling more of an existing product or service to existing customers.

  e.g. seasonal range

  usually organic growth (internal)
• What are some positives of market penetration?

  focuses on markets and products it knows well

  know was customers want and competitors do

  unlikely to need significant new market research

  least risky
• What is market development?

  Expanding existing products into new markets Giving new distribution channels
• What is an example of a failed market development?

  Starbucks expansion into china
• What are some positives of market development?

  Good strategy when their markets are saturated or in decline

  cross subsidise
• What are some negatives of market development?

  Really risky

  existing products might not suit new markets such as Starbucks in Australia
• What is product development?


  The process of creating and improving products to meet customer needs and market demands.
• What is an example of failed product development?

  Coca Cola life
• What are some positives of product development?

  Plays to the strengths of the business

  flows naturally from market penetration

  effective market research

  exploits the existing customer base
• What are some negatives of product development?

  Have to be first to market which can be costly

  can damage the brand if it fails

  has to be wanted by customers (no point flogging a dead horse)
• What are some approaches to diversification?

  Innovation and research and development

  acquire existing businesses

  extend existing brand into new markets
• What are some positives of diversification?

  If it’s risky you can spread the risk through cross subsidising
• What’s an example of successful diversification?

  alphabet own google and nest
• What are some negatives of diversification?

  most risky as the market is unknown

  few economies of scale

  can ruin the brand
• What is an example of unsuccessful diversification?


  ITV bought friends united for £175 million and sold the fold for £25 million