Essay Example on Igor Ansoff developed Ansoff Matrix

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What is Ansoff Growth Matrix Igor Ansoff developed Ansoff Matrix a strategist who first published in the Harvard Business Review in 1957 in an article named Strategies for Diversification It has been a great advantage for business leaders and a simple way to get to know about the risks of growth It also is known as the Product Market Expansion Grid the Matrix shows four strategies you can use to grow by analyzing the risks associated with each one It has been divided into four possible combinations Apple could use each of these four categories in order to manage its existing products and develop new products services The Four Growth Options Of The Ansoff Growth Matrix Market penetration strategy Product development strategy Market development strategy Diversification 1 Market penetration Market penetration refers to the growth strategy where the business focuses on selling existing products into existing markets Below are a few of the main objectives Market penetration focuses on The firm seeks to achieve growth with existing products in their current market segments aiming to Increase its market share http www quickmba com strategy matrix ansoff Increasing the market share of the current products for example by a mixture of competitive pricing strategies advertising sales promotion and many more Restructuring the market to drive out competitors for example by promotional campaigns maintaining pricing strategy which creates an unattractive market for competitors

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Increase usage from existing customers for example by introducing loyalty schemes Apple releases new and updated version of iPhone every 12 months by adding a variety of new features to its product giving its consumers what they need Samsung being the biggest competitor it becomes difficult for Apple to win over So the best that Apple Inc could do is promoting its products massively and convincing for the customers to buy the product making the competitor s products unattractive 2 Market development Market development refers to the growth strategy where the business seeks to sell its existing products into new and innovative markets Market development is riskier than market penetration because of walking into new markets The firm seeks growth by targeting its existing products to new market segments Below are few methods to approach this strategy http www quickmba com strategy matrix ansoff New environmental markets for example spreading the product to new countries New distribution techniques for example selling through the Internet Different pricing plans to attract new customers Apple s first released in the US was a great success They continued developing these products of theirs and as their reputation was getting more famous opening as many stores worldwide The fact that these products have reached the other side of the globe that already indicates market development and have expanded 3 Product development Product development refers to the growth strategy where a business aims to introduce new products into existing markets In order for the organization to avoid competitive products from competitors the organization needs to differentiate by introducing new features and new products to the market frequently The firm develops new products targeted to its existing market segments Below are few product development strategies http www quickmba com strategy matrix ansoff Researching developing and being innovative Study the customer needs and interests Be the first to introduce to the market Apple is already a globally recognized product in major markets understanding its customer needs any wants they are always close ahead of its competitors Producing the first and best in the market there is an increase in customer relationships in multiple platforms and therefore creates brand loyalty

This increases the likelihood of new products being a success Diversification Diversification refers to the growth strategy where a business markets new products into new markets Have higher chances to be a risky strategy since the business is walking into markets with only a little experience For a business to adopt a diversification strategy they must first have a clear idea about what it is expecting to gain and to lose from this strategy The firm grows by diversifying into new businesses by developing new products for new markets http www quickmba com strategy matrix ansoff This is the most risky of all the strategies as it involves delving into a totally new market with a totally new product WMG 2010 Apple originally started as Apple computers best known as the Macintosh personal computers Later Apple Inc shifted towards a digital hub strategy by the launching of IPod s followed by iPhone s and finally IPad s Changing its industry from computers was really risky These were risks in the market which proved to be successful in the end Shifting its industries Apple differentiated itself from various competitors and gave the company a competitive advantage over the other companies Gains From Ansoff Matrix The Ansoff Matrix is very useful in coming up with a growth strategy for an Organization Apple Inc explores all the possible growth opportunities and it has helped in their growth and expansion It has also pointed out areas where there is still room for growth and expansion The matrix works on the basis that for a company to grow it must decide where and how to be competitive in current or new markets or through current or new products Lester 2009

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