Strategic Focus & Expansion Models: Deciding Where & How to Grow Flashcards
Ansoff matrix
- Market penetration
- Market development
- Product development
- Related diversification
- Each move into a new quadrant increases risk
Requires new knowledge, activities, resources, positioning
Market Penetration → low risk
- If I decrease price, will volume compensate for lower price, affect brand image?
- Sell more of existing product to existing target market
= greater market share and/or greater purchase frequency - Build on what you have & know
Market Penetration tactics
Cut prices
Increase advertising, loyalty schemes
Increase distribution channels
Market Penetration Diamond-E and porters insights
Capabilities: Can I persuade customers to consume more of my product?
Resources: Do I have to use new distribution channels? Should I? Can I? Do I have the production capacity to meet the increased demand?
and
Buyers: Propensity to switch? Lock in/switching costs? Brand loyalty?
Rivalry: Fragmented vs concentrated, growing vs declining, aggressive vs passive
Market Development → low-medium risk
- Sell what you already produce to new target markets/segments/geographic areas
- Capitalize production capabilities, scaled economies, less contested/larger market
- Diversify customer base
Market Development Tactics
Create awareness in new market – pitch benefits to new customers
Expand geographically (using international expansion knowledge)
Market Development Diamond-E and porters insights
Capabilities: Will the product need adjustments? Can I make them? Resources: Will this affect my brand image? Do I have the resources to go international? distribution network, knowledge of new customers/market
and
Entry: Can I access the distribution channels to reach this new market?
Buyer Power: Are the customers accessible? Will they switch?
Rivalry: Fragmentation, aggression, growth?, differentiation, underserved segments
