Ansoff Flashcards
What are the 4 strategies within Ansoff?
Market penetration
Product Development
Market Development
Diversification
What is market penetration?
existing product existing market (low risk)
What is market development?
existing product new market (moderate risk)
What is product development?
existing market new product (moderate risk)
What is diversification?
new products in new markets (riskiest)
What are the types of diversification?
Product diversification
Geographic market diversification
Product-market diversification
What is product diversification?
operating in multiple industries
What is geographic market diversification
operating in multiplem geographic markets
what is product market diversification?
operating in multiple industries in multiple geographic markets
What are the two categories of diversification?
Related
unrelated
What is related diversification
expanding into products or services with relationships to the existing business
What is unrelated diversification?
diversifying into products or services with no relationship to existing businesses
What is conglomerate diversification
an extreme version with no operational or strategic linkages between businesses
what are the benefits of conglomerate diversification
gains from the reputation of the group and potentially lowers financing costs
what is a cost of conglomerate diversification
costs arise because there are no obvious ways to generate value
Reasons for diversification
Expectations of powerful stakeholders
Response to market decline
Risk sharing
Market power
Reasons for integration
Control
Access to information
Cost reduction
Development of strategic capabilities
What is divestment
When an organisation decides to pull out of one or more of its businesses
Reasons for divestment
Poor performance
investor pressure
value of unit is more than value generated
Types of divestment
Spin off
Sell off
What is spin off divestment
SBU shares are distributed to parent company shareholders
What is a sell off divestment
SBU sold to another company
What is an equity carve out divestment
parent company sells a portion of shares to public but retains a significant portion to retain control of business
