Strategic Direction Flashcards
What is The ansoff matrix
The ansoff matrix is a strategic tool used by businesses to help choose the market they wish to operate in and what products they’d like to sell within the market
The ansoff matrix ~ drawn
Market penetration
A strategy to boost sales of current products within the current market
Approaches of market penetration
Incr promotional activities Change pricing model Build brand image Customer loyalty Incentivise customers
Benefits of market penetration
Low risk
Product and market are familiar
Limited investment required
Limitations of market penetration
Possibly limited growth potential
Business becomes vulnerable if it does not innovate
Product development
Develop new products for existing customers
Possible approaches to product development
Conduct market research with existing customers
Use product portfolio tools to manage product range
Divert funds into r&d and product development
Benefits of product development
Familiar with customers
Builds on/ innovate current products
Limitations of product development
Product development takes time and can been expensive
Product cannibalisation
Market development
Take existing products into new markets
