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Long-term business strategy is dependant on

planning for their introduction Ansoff Matrix


represents the different options open to a marketing
manager when considering new opportunities for
sales growth
Ansoff's Product Market grid
 Two variables in Strategic marketing Decisions:
 The market in which the firm was going to operate
 The product intended for sale
 In terms of the market, managers had two options:
 Remain in the existing market
 Enter new ones
 In terms of the product, the two options are:
 selling existing products
 developing new ones
Existing PRODUCTS New

Existing INCREASING RISK


MARKET
PRODUCT
PENETRATION
DEVELOPMENT

INCREASING RISK
Sell more in existing
Sell new products in
Markets
existing markets
MARKETS

MARKET
EXTENSION DIVERSIFICATION

Achieve higher Sell new products in new


New
sales/market share markets
of existing products
in new markets
Existing PRODUCTS New

Existing INCREASING RISK


MARKET
PENETRATION

INCREASING RISK
Sell more in existing
Markets

MARKETS

New
When a company has a product is in the current market, its
share on the market can still grow. To increase current
product’s market share can be used three major approaches:

1. The company can try convincing the current customers to


buy more products.

2. The company can focus in attracting competitor’s


customers.

3. The company can focus its efforts in convincing non-users


to start using the product.
Existing PRODUCTS New

Existing INCREASING RISK


MARKET
PENETRATION

INCREASING RISK
Sell more in existing
Markets

MARKETS
MARKET
EXTENSION

New Achieve higher


sales/market share
of existing products
in new markets
A company can use three approaches to develop the market
when is launching a current product on a new market:

1. The company can try to expand its distribution


channels.

2. The company can start selling the current product in


new locations.

3. The company can identify the potential users of the


current product on the new market.

.
Existing PRODUCTS New

Existing INCREASING RISK


MARKET
PRODUCT
PENETRATION
DEVELOPMENT

INCREASING RISK
Sell more in existing
Sell new products in
Markets
existing markets
MARKETS

MARKET
EXTENSION

New Achieve higher


sales/market share
of existing products
in new markets
When a company launches a new product on the current
market, it can use the following intensive growth
strategies:

1. The company can develop new features for the


product.

2. The company can develop different product quality


levels.

3. The company can improve the product’s technology.


Existing PRODUCTS New

Existing INCREASING RISK


MARKET
PRODUCT
PENETRATION
DEVELOPMENT

INCREASING RISK
Sell more in existing
Sell new products in
Markets
existing markets
MARKETS

MARKET
EXTENSION DIVERSIFICATION

Achieve higher Sell new products in new


New
sales/market share markets
of existing products
in new markets
Diversification with new products launched on new markets can
be achieved by:
1. Concentric Diversification Strategy: Developing new products
for new market segments using the earlier technology. That is
called concentric diversification strategy.

2. Developing new products for new markets in a conglomerate


diversification strategy.

3. Developing new products for old customers, using new


technology. This is called horizontal diversification strategy.
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

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