1. IB Business & Management
Ansoff and his Matrix

2. Topic objectives
Explain the value of Ansoff’s matrix as a decision making tool.
Apply the matrix growth strategies to a given situation

3. First a little something to get you thinking
Some might say this is Liam Gallagher (former Oasis frontman) looking back in anger, but has he finally found something worth living for?
What Business Studies ideas can you get from the up and coming clip?

4. Is it my imagination or is this Business Studies?
You’ll be mad for this one!
Warning Very Strong Language!

5. So what did you get? Reasons for starting a business?
Marketing strategies?
Niche Vs Mass?
Diversification?
Which leads on to Ansoff and his matrix…

6. What is it?
A tool to help a business decide their product and growth strategy
N.B. It will not make the decision for you!

7. 2 sets of categories = 4 options
We look at either new or existing products
and
New or existing markets
He then gave a name to each of the four options this threw up.

8. Ansoff’s Matrix…

9. Market Penetration
Here we market our existing products to our existing customers.
This means increasing our revenue by, for example, promoting the product, repositioning the brand, and so on.
However, the product is not altered and we do not seek any new customers.
Often a low risk, low return option.

10. Market Development
Here we market our existing product range in a new market.
This means that the product remains the same, but it is marketed to a new audience.
Exporting the product, or marketing it in a new region, are examples of market development.
Medium risk/return

11. Product Development
This is a new product to be marketed to our existing customers.
Here we develop and innovate new product offerings to replace existing ones.
Such products are then marketed to our existing customers.
This often happens with the cars where existing models are updated or replaced and then marketed to existing customers.
Medium risk/return

12. Diversification
This is where we market completely new products to new customers.
This can be broken down into two further subsets

13. Diversification: related
Related diversification means that we remain in a market or industry with which we are familiar.
For example, a soup manufacturer diversifies into cake manufacture (i.e. the food industry).
The most risky option

14. Diversification Unrelated
Unrelated diversification is where we have no previous industry nor market experience.
For example a music company invests in the rail business.

15. How would you use it?
It helps companies put the options in the right box and then focus on what is the best for them
Try not to look at it as 4 categories, but as scale.
For example, it is never going to be exactly the same customers

16. Quick test to see if you’re awake
If you were Microsoft, where would you put the x-box in the matrix

17. Quick test to see if you are awake
If you were Apple, where would you put the i-phone?

18. School lunches School lunches provided to the whole community
Nice example of……?