Explain How the ‘Ansoff Matrix’ Can Be Applied to Help Develop Strategic Marketing Options for an Enterprise.

Topics: Strategic management, Marketing, Growth-share matrix Pages: 11 (3082 words) Published: March 26, 2010
Explain how the ‘Ansoff matrix’ can be applied to help develop strategic marketing options for an enterprise. What other analytical tools and techniques can be employed to develop alternative marketing strategies?

Table of contents

1. Introduction

2. The Ansoff Matrix

3. Market Penetration

4. Product Development

5. Market Development

6. Diversification

7. Limitations of the Ansoff matrix

8. Other analytical tools and techniques

9. Conclusion

10. References


From my working experience I have discovered, an organisation that knows its shortcomings, and can make relatively strategic decisions to meet the right objectives, will achieve its desire to become successful and remain relevant. Successful organisations in Nigeria always attribute their success to unique strategies which they employed efficiently.

Strategies are developed at different levels within an organisation, it therefore follows that objectives (what it wants to achieve) are also set at the different levels. The setting of these objectives will usually produce a discrepancy between what is currently being achieved and what needs to be achieved. Marketing strategies are the explanation of how this gap is going to be closed and the objectives realized. Ansoff matrix is a useful framework for looking at possible strategies to reduce the gap between where the company may be without a change in strategy and where the company aspires to be (Proctor, 1997).

The Ansoff matrix which is the focus of this work is one of the models alongside others like the Porter matrix, BCG, SWOT, PESTEL, DPM matrix and Gap analysis etc used by marketers to set objectives which assist strategic decision making. The Ansoff matrix is also used in marketing audits (Li et al, 1999). I will attempt to explain within the limitation of word content, how the Ansoff can be applied to help develop strategic marketing options for an enterprise. Some of these other analytical tools and techniques will also be discussed in the second section this work.

The Ansoff Matrix

The Ansoff matrix presents the product and market choices available to an organisation. Herein markets may be defined as customers, and products as items sold to customers (Lynch, 2003). This matrix helps companies decide what course of action should be taken given current performance. The Ansoff matrix is also used in marketing audits (Li et al, 1999). The Ansoff matrix entails four possible product/market combinations: Market penetration, product development, market development and diversification (Ansoff 1957, 1989).

Ansoff Product-Market Growth Matrix

Source: Ansoff (1957, 1989)

A market penetration strategy is used when and organization wants to achieve and increased share in the market. A market development strategy in contrast involves the organization searching for new markets in which to sell its current product. A product development strategy involves identifying new needs within the existing market and developing products to meet these needs while the diversification strategy involves the organisation entering new markets with new products. I will now elaborate on these four strategies to show how they help develop strategic marketing options for an enterprise.

Market Penetration
Market penetration occurs when a company penetrates a market with its current products. It is important to note that the market penetrations strategy begins with the existing customers of the organization. This strategy is used by companies in order to increase sales without drifting from the original product-market strategy (Ansoff, 1957). Companies often penetrate markets in one of these three ways: by gaining competitors customers, improving the product quality or level of service, attracting non-users of the products or convincing current customers to use more of the company’s product, with the use of marketing...

References: Ansoff, I. H. (1957), Strategies for diversification, Harvard Business
Review, Vol
Ansoff, I. (1989), Corporate Strategy, rev. edn, Penguin,
Hill, W. L. C. & Jones, R. G. (2007), Strategic Management: An
Integrated Approach, 7th ed., Houghton Mifflin Company,
Li, S. & Duan, Y. & Kinman, R. & Edwards, J. S. (1999), A framework
for a hybrid intelligent system in support of marketing strategy
Lynch, R. (2003), Corporate Strategy, 3rd ed., Prentice Hall Financial
Macmillan, H. & Tampoe, M. (2000), Strategic Management, Oxford
University Press.
Module 1, Unit 2, (2006) MN7002/D, Strategic Marketing, (ed. 10th),
Pearson, G. (1999), Strategy in Action, Prentice Hall Financial Times.
Vignali, C. (2001), Virgin Cola, British Food Journal, Vol. 103, No. 2.
Porter, M. E. (1987), From competitive strategy to corporate strategy,
Harvard Business Review.
Osime R. (2009), Thisday Awards ’09, Thisday Magazine, Volume
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Thompson, A. A. & Strickland, J. A. (2003), Strategic Management:
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