1. 20/9/16 – Business- Ansoff’s Matrix, Boston Matrix…..

2. Marketing Strategies – How to choose?
Strategy is about the future…
Strategy must be achievable…
Strategy is company specific…

3. Ansoff’s Matrix Igor Ansoff sought to categories strategies
His model outlines potential growth strategies by increasing sales in existing or new markets using existing or new products
Model provides four main strategy types to choose between
Considers high risk / high reward / vs. lower risk / lower reward

4. The Ansoff Growth matrix is another marketing planning tool that helps a business determine its product and market growth strategy

5. Ansoff’s Matrix – short film from Tutor4u
In groups – referencing the above link - discuss the terms:
Market Penetration
Product Development
Market Development
Diversification

6. The 4 quadrants: Market Penetration
Focus on building sales of existing products within existing markets – increase market share 
known market, established product
simplest and most predictable
least risky 
may be least potential for growth
not stretching the scope of the firm

7. The 4 quadrants: Market Development
Find a new market for an existing product 
knowledge of the product
know what works, who likes it, etc 
don’t know about new market
requires a lot of research to reduce risk
can dilute the efficacy of the product to the previous markets if firm isn’t careful

8. The 4 quadrants: Product Development
Launching a new or improved product to an existing market 
known customers & market
useful when extension strategies are required for an older product
it may take little to inject new energy into an old product 
any new product carries risks
requires significant research & testing

9. The 4 quadrants: Diversification
Targeting a new market with a new product 
potential reward is very high, esp. if it’s an untapped market
helps when existing products and markets offer little opportunity
helps firm to diversify, potentially reducing risk
helps firms move away from markets in decline 
risky!!
lots of unknowns - new product and new market

10. Diversification High risk and low risk
Related diversification is lower risk, eg integration (merger/takeover)
With a firm in the same industry but at a different stage of production
Tesco buying a food manufacturer
Apple buying PC World
Unrelated is higher risk
The business will have no experience of the new product and market

11. Diversification Firms may seek to mitigate the risk
Buy an existing firm in the industry
Asda buying B&Q is less risky than starting from scratch
Enter only successful and growing markets
Particularly if the firm has a strong brand, the risks are reduced

12. Review of Strategy Matrices
Porter’s GENERIC Matrix (Low Cost vs Differentiation; Niche vs Mass Market)
Market Positioning – Remember Porter’s recommendation toward either a low cost and differentiation strategy (“deliberately choosing to be different”) -> Aldi stores have c stock units, a large Tesco will have 75,000
Ansoff’s matrix explores the risks involved in strategic decisions
Ansoff Matrix examines New and Current Product and Market combinations, in context of Risk and Reward

13. Growth Rate vs Market Share
Boston Matrix – allocating investment / resources across a product portfolio
Growth Rate vs Market Share

14. Boston Matrix – In groups, consider what are: Cash Cows Dogs
Question Marks
(also known as Problem Child)
Stars
Can you think of any practical examples?

15. Boston Matrix – What are the assumptions, usefulness, problems?

16. Boston Matrix – What are the assumptions, usefulness, problems?
investment in marketing  Market share
Market share gains  generate cash surpluses (especially when product mature)
Best opportunity to build a dominant market position is during the growth phase
Usefulness:
Useful tool for analysing product portfolio decisions – but only a snapshot, with no/little predictive value
Does not take account of environmental factors
Problems:
Market growth is an inadequate measure of a market's attractiveness
Market share is an adequate measure of a products ability to generate cash
The focus on market share and market growth ignores issues such as developing sustainable competitive advantage
The product life cycle varies

17. Kay’s distinctive capabilities (1993) (Not found in Marcouse but required by Edexcel)
TO START - How have firms developed a Competitive Advantage?
(AKA What are the foundations of Corporate Success?)
framework-a-study/
Architecture is the framework of contacts inside or around the company with suppliers, customers and with employees.
Innovation can lead to competitive advantage and thus can prove to be a harbinger of success.
Reputation - the experience of customers, quality, word of mouth and association of warranty with other companies. It also comprises putting the reputation at stake once the company becomes famous.
Examples? Kay cites BMW, Honda, Saatchi & Saatchi, IBM

18. SWOT completed for homework…..make sure you took good notes of ch. 4
Will complete topic 3.1 “Business objectives and strategy” – thereafter 3.2 “Business Growth” (6 topics in all)