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1 Ansoff’s Matrix Current Markets New Markets Market Penetration Market Development Product Development Diversification Current Products New Products.

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Presentation on theme: "1 Ansoff’s Matrix Current Markets New Markets Market Penetration Market Development Product Development Diversification Current Products New Products."— Presentation transcript:

1 1 Ansoff’s Matrix Current Markets New Markets Market Penetration Market Development Product Development Diversification Current Products New Products

2 2 Existing Products New Products Product/Market Expansion Grid Market Penetration Market penetration is a strategy of increasing your share of existing markets. This might be achieved by raising customers’ awareness of products and services or finding new customers. Product Development Product development is a strategy for enhancing benefits you deliver to customers by improving existing products and services or developing new ones. Market Development Market development is a strategy of finding and entering new markets with current product or service range. The new market could be a new region, a new country or a new segment of the market. Diversification Diversification is a strategy that usually carries high costs and high risks. It often requires organisations to adopt new ways of doing business and so has consequences far beyond simply offering new products/services in a new market. It is therefore usually a strategy to be adopted when other options are not feasible. Adapted from Ansoff I. (1968) New Markets Existing Markets

3 3 Boston Box Relative Market Growth Rate Stars Cash Cows Question Marks Dogs Relative Market Share

4 4 Cost|Focus|Differentiation Focus DifferentiationLow Cost

5 5 Red Ocean Compete in existing markets Beat the competition Exploit existing demand Make the value-cost trade-off Align the organisation to differentiation or low cost Create uncontested market space Make the competition irrelevant Create and capture new demand Break the value-cost trade-off Align the organisation to differentiation and low cost Blue Ocean Kim, Chan W., and Mauborgne, Renee (2005) Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant Boston, Harvard Business School Press.

6 6 Reduce Which factors should be reduced well below the industry standard? Create Which factors should be created that the industry has never offered? Eliminate Which of the factors the industry takes for granted should be eliminated? Raise Which factors should be raised well above the industry standard? A New Value Curve The Four Actions Framework Reduce Cost Raise Demand Particularly eliminate and create to make the existing rules of competition irrelevant and move beyond competition onto new space…

7 7 Six principles Formulation Reconstruct market boundaries Focus on the big picture, not the numbers Reach beyond existing demand Get the strategic sequence right Execution Overcome key organisational hurdles Build execution into strategy Kim, Chan W., and Mauborgne, Renee (2005) Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant Boston, Harvard Business School Press.

8 8 Strategy Canvas and Value Curve Price Marketing Quality New Factors Prestige Factors Low High New Factors Blue Ocean Red Ocean


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