Access to raw material, technology usage and human resources can be compounded to minimise costs without an adverse effect on products and services. The organisation moves into a market or industry they have no experience with. Introduce a loyalty scheme. As stated above, there are four output options for the Ansoff Matrix.
Although helpful, it is not a guarantee that this research will ensure a successful new product introduction. They need to find new ways to increase profits and reach new customers.
This new product development has allowed Google to sustain its competitive advantage in the Internet web browser market.
This strategy allows organisations to capture new customers in existing markets, customers that may not have been captured before.
The other method is via new distribution channels. A good example is car manufacturers who offer a range of car parts so as to target the car owners in purchasing a replica of the models, clothing and pens.
The baking soda product was transformed from being used mainly for baking purposes, to being used as a household cleaning and deodorizing product.
Market Development is a far much risky strategy as compared to Market Penetration.
If an organisation is able to identify the key factors for success it can then increase its chances of implementing a successful diversification strategy.
One advantage of choosing to use a strategy of market penetration is that there is little risk associated with such a strategy. Because of the high risks explained above, many companies attempting to diversify have led to failure.
You want to avoid diverting your existing sales to the new product as this will simply maintain revenues rather than increase your market share. As can be seen in the example above, Arm and Hammer was able to generate new uses for an existing product.
This strategy is considered to have a moderate risk associated with the time and money needed to develop new products. In this situation, it can leverage its strengths by developing a new product targeted to its existing customers.
For example, a cake manufacturer diversifies into a fresh juice manufacturer. That way it may attract a different customer base. It is a way of weighing the pros and cons of different strategic options and the risks associated with each.
Financial models are used to assess risk and project investor scenarios in new markets. The company continues to maintain a reputation as a product innovator. As the diagram demonstrates, the matrix will give managers four possible scenarios, or strategies for future product and market activities.
The second dimension involves the expected outcomes of diversification: A typology of diversification strategies[ edit ] Trend in product variety for some models in the USA  The strategies of diversification can include internal development of new products or markets, acquisition of a firm, alliance with a complementary company, licensing of new technologies, and distributing or importing a products line manufactured by another firm.
Again, the company was able to take an existing product, namely oil, and increase its penetration in an existing market. Ansoff Matrix To portray alternative corporate growth strategies, Igor Ansoff presented a matrix that focused on the firm's present and potential products and markets (customers).
By considering ways to grow via existing products and new products, and in existing markets and new markets, there are four possible product-market combinations. Ansoff growth matrix is an important planning tool that helps organisations determine their growth strategies.
There are a number of growth strategies an organisation may pursue and Ansoff has outlined four of them i.e. market penetration, market development, product development and diversification. In this article, the following issues will be discussed: SWOT analysis of the hi-fi sector, Strategies of Ansoff matrix and Apple's business models.
SWOT Analysis. the Ansoff matrix The Ansoff product/ market matrix is a tool that helps businesses decide their product and market growth strategy. Ansoff’s product / market matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets.
The Ansoff matrix was invented by Igor Ansoff in and is used to develop strategic options for businesses. It is one of the most commonly used tools for this type of. Ansoff Growth Matrix Tourism. 3. The Ansoff Matrix Ansoff () designed a framework called Ansoff Matrix.
This strategy helps identifying corporate growth opportunities, also analysing companies based on market, product with possible growth opportunities which .Ansoff growth matrix tourism