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The Ansoff Matrix.

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The Ansoff Matrix [image001.jpg] [image002.jpg] [1][image003.jpg] [2][image004.jpg] [image005.jpg] [3][image006.jpg] [4][image007.jpg] Existing Markets/Existing Products - Market Penetration Market Penetration strategy means the continuation of an existing strategy. It may be appropriate in the short-term when the market is static or when the business is waiting to see how situations develop. However, in the long term such tactics are unlikely to be realistic or beneficial. They may reflect a lack of strategic awareness on the part of the management team. Market penetration involves gaining market share as opposed to maintaining it. When the overall market is growing, penetration may be relatively easy to achieve, because the absolute volume of sales of all firms in the market is growing and some firms may not be able to satisfy demand. ...read more.


Vertical integration refers to the development of activities, which involve the preceding or succeeding stages in the organisation's production process. Backward or upstream vertical integration takes place when the organisation engages in an activity related to the proceeding stage in its production process. Forward or downstream vertical integration takes place when the organisation engages in an activity related to a succeeding stage its production process. Conglomerate diversification refers to the situation where at face value the new activity of the organisation seems to bear little or no relation to it's existing products or markets. The advantages of diversification include: * Cost savings due to the effects of synergy (where the combined effect exceeds the sum of the individual effects) * Spreading of risk * Control of supplies (mainly related to vertical integration) ...read more.


Cadburys Product Development would be their new product such as Boost, Mye and Snow flake, which Cadburys have done to widen their product range. Cadburys Market Development is when they put their chocolate bars into different markets such as seasonal good such as Easter eggs for example a dairy milk Easter egg. Cadburys Diversification is when they move in to another market such as the drinks market as Cadburys Schweppes, which do lemonade and tonic water. Another form of Cadburys Diversification would be Cadburys moving from chocolate bars to chocolate cake and biscuits. Evaluation of the Ansoff Matrix This model is very simplistic as only shows areas which products can go into or what they can do it has nothing about business finance or other external factors and its not always the same for all market. But this model is useful if you use it with the Boston matrix and the PLC. ...read more.

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