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Ansoffs Matrix

A common tool used within marketing was developed by Igor Ansoff in 1957. His model gives organisation five strategic business options.

1. Market Penetration: This involves increasing sales of an existing product and penetrating the market further by either promoting the product heavily or reducing prices to increase sales.

2. Product Development: The organisation develops new products to aim within their existing market, in the hope that they will gain more custom and market share. For Example Sony launching the Playstation 2 to replace their existing model..

3. Market Development: The organisation here adopts a strategy of selling existing products to new markets. This can be done either by a better understanding of segmentation, i.e who else can possibly purchase the product or selling the product to new markets overseas.

4. Diversification: Moving away from what you are selling (your core activities) to providing something new eg Moving over from selling foods to selling cars.

5. Consolidation: Where the organisation adopts a strategy of withdrawing from particular markets, scaling back on operations and concentrating on its existing products in existing markets.

 

 

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Further reading:

Case studies from www.thetimes100.co.uk

Principles of Marketing by Philip Kotler

Principles of Marketing by Frances Brassington