Business objectives and strategy - Ansoff's matrix Flashcards
explain the nature and purpose of AM?
marketing tool/ planning model that helps a business determine its product and market growth strategy and looks at risks involved
distinguish between the quadrants of AM:
top left: Market Penetration
bottom left: Market development
top right: product development
bottom right: diversification
what is market penetration?
business aims to sell existing products into existing markets
LEAST RISKY
what is the aim of market penetration?
increase market share by selling more to current target market
evaluate market penetration?
- businesses focus on markets and products it knows well
- business can exploit insights on what customers want
- unlikely to need significant new market research
what is market development?
growth strategy where the business seeks to sell its existing products into new markets
MEDIUM RISK
evaluate market development?
- logical strategy where existing markets are saturated/in decline
- often more risky than product development
- existing products may not suit new markets
what is diversification?
business markets new products into new markets
MOST RISKY
evaluate diversification?
risky:
- no direct experience of product/market
- however, the risk is spread if successful
what are the approaches to evaluation?
- develop new solutions
- acquire existing businesses
- extend an existing brand into new market
what is product development?
business aims to introduce new products into existing markets
MORE RISK
