Ansoff Matrix - Ansoff is Igor Ansoff developed a common tool used within marketing in 1957

University Degree Business and Administrative studies

Ansoff Matrix

Ansoff is Igor Ansoff developed a common tool used within marketing in 1957. His model gives organisation five strategic business options.

Market share Shares in Sony have crashed almost 12% to two-year for the past quarter of their business year. The share price dropped, in heavy trading in Tokyo, this wiped more than $6bn off the Sony’s market value.

Analysts were pessimistic about the stock outlooks, saying no sustained improvement could be expected until at least early following year, when the results of the October-December sales season would become clear.

Sony posted their first-quarter net loss of 30.1bn yen (£171m; $244m) after their flagging consumer spending noticed that key games unit fail to match expectations. Operating profit was down more than 90%, shares closed at 6,260 yen, down 11.5%.

Market penetration

This involves increasing sales of an existing product and penetrating the market further by either promoting the product heavily or reducing prices to increase sales.

Sony is highly good at market penetration, Sony has had enormous success in the video games market, since the launch of the original PlayStation, which triumphed over rivals Nintendo and Sega.

Sony has won wide acclaim from games developers for its initial proposals for PlayStation 2, which was equipped with Internet access. Sony's research has recently been focusing on a number of hi-tech gadgets for digital audio and computer memory.

Market Development

The organisation adopts a strategy of selling existing products to new markets. A better understanding of segmentation can do this either, i.e. who else can possibly purchase the product or selling the product to new markets overseas.

Sony hopes to start a first ever-broadband distribution platform for games for its upcoming PlayStation 2. Broadband delivery would accompany current ...

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Market Development

Sony hopes to start a first ever-broadband distribution platform for games for its upcoming PlayStation 2. Broadband delivery would accompany current modes of content delivery including the built-in DVD media player. PlayStation 2 would be the first game machine to receive rich media content directly over the Internet.

Broadband delivery of games and other types of entertainment content can be viewed as a strong long-term positioning of the PlayStation 2. In this light, the product would be sold as more than a videogame machine - it will be an entertainment set-top box.

Product development

The organisation develops new products to aim within their existing market, in the hope that they will gain more custom and market share. For Example Sony launching the Playstation2 to replace their existing model.

IBM has agreed on a contract to produce the next generation of microprocessors for Sony's Playstation3 games console. The new chip will be designed for the broadband era, allowing the games machines and other "intelligent" devices to communicate with each other or connect to the Internet.

This will help Sony reach its goal of equipping Playstation2 with Internet access - once a sufficient number of playstation2 owners have access to broadband Internet in their homes.

Diversification

Moving away from what you are selling (your core activities) to providing something new e.g. Moving over from selling foods to selling cars.

Sony recently made about announcements about the upcoming Japanese release of PS2 broadband. The service will give the user the ability to download movies, games, and music off of the Internet, and should go live in April. The cost for the service will vary, with one provider saying it plans to charge a monthly fee of $11 for the game and Internet access service, and a one-time $135 fee to allow users to download games to their PlayStation 2s.

Sony now wants to start offering full Internet access and to have their own internet provider like AOL, Bt-open world, this would be a great achievement for Sony because only their console would be able offer this facility.

BCG Growth-Share Matrix

The BCG Growth-Share Matrix is a portfolio-planning model developed by Bruce Henderson of the Boston Consulting Group in the early 1970's. It is based on the observation that a company's business units can be classified into four categories based on combinations of market growth and market share relative to the largest competitor, hence the name "growth-share". Market growth serves as a proxy for industry attractiveness, and relative market share serves as a proxy for competitive advantage. The growth-share matrix thus maps the business unit positions within these two important determinants of profitability.

BCG Growth-Share Matrix

Resources are allocated to business units according to where they are situated on the grid as follows:

Cash Cow - a business unit that has a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be used to invest in other business units.

Star - a business unit that has a large market share in a fast growing industry. Stars may generate cash, but because the market is growing rapidly they require investment to maintain their lead. If successful, a star will become a cash cow when its industry matures.

Question Mark (or Problem Child) - a business unit that has a small market share in a high growth market. These business units require resources to grow market share, but whether they will succeed and become stars is unknown.

Dog - a business unit that has a small market share in a mature industry. A dog may not require substantial cash, but it ties up capital that could better be deployed elsewhere. Unless a dog has some other strategic purpose, it should be liquidated if there is little prospect for it to gain market share.