Advantages Of Ansoff Matrix

This first strategy calls for the creation of more sales without changing the original product, which can achieved through the four P’s of marketing. The next strategy, market development, allows the supplier to find new markets for their current products by using demographic markets to see where the greatest revenue will be based on the target group you are selling to (seniors, teens, etc.). Product development is the next strategy which focuses on new products the modification of current products. This strategy is rather important as without evolving products to meet the ever changing needs of current and potential companies can see a loss in sales and would limit their ability to be competitive in the market. The final strategy is diversification. This strategy calls for companies to attain current or new businesses allowing them to “diversify” their offerings and break into new markets.

Due to the growing competition and diminishing market share, companies are opting for different strategies to achieve their survival objectives as well as growth. Companies are thus executing grand strategies to provide their businesses with a clear direction for its strategic actions. These strategies, therefore, aim at both short term and long term sustainability and growth, and they include innovation, market development, product development, and concentration.

Chapter 6 – Strategy Formulation: Situation Analysis and Business StrategyChapter 7 – Strategy Formulation: Corporate StrategyChapter 8 – Strategy Formulation: Functional strategy and Strategic Choice

Ansoff’s Matrix is a useful tool for analysing the approach to the marketing strategy of a business. The matrix puts markets against products and will suggest one of four marketing strategies for the business to follow.

Organizations pursuing this type of business strategy try to develop a competitive advantage based on product innovation. The strategy requires employees to continually develop new products and services to create an organization’s advantage in the market. These companies create and maintain an environment that encourages employees to bring new ideas into the company.

1, What are the strategic options for product and/or market development for the organisation? – Ansoff’s product-matrix

Today’s market demands organizations to have a strategic plan. The purpose of the strategic plan describes where the organization wants their organization to go. A strategic plan is a document used to communicate goals, and the actions needed to achieve those goals. In order to remain competitive every organization needs to innovate to stay ahead of the competition. They need to develop new products and services with increasing frequency. The design of these new products and services must meet, or exceed, customer expectations and at the same time, they must generate an acceptable financial return for the organization. However, any business that does not realize the importance of developing new products will not last very long as a consequence

To develop such strategy mix of strategic options will be applied including Integration to deal with competition and Intensive + Diversification strategies for product and market development.

A competitive strategy, or business-level strategy, is the way a business used to successfully enter and penetrate into a market (Eastwood et al, 2006), and also, to succeed in this chosen market against its competitors (Johnson et al, 2014). A company needs to develop and apply appropriate strategy to help the company to generate distinctive competences (David, 2007). Compared with the strategies implemented in other levels of operation, competitive strategy is more focused on the competition against other competitors and strategic choices to better attain market share (Harrison and St. John, 2009). According to

Diversify their portfolio of service and product offerings to meet the strategic needs of their target market.

Strategy formulation has been acknowledged as one of the most crucial factors of ensuring the long-term growth of the business. However, the manner in which strategy is formulated, and most importantly, the nature of the strategy chosen for the company determines its future position in the marketplace (Grant, 2005).

Competitive strategy, after Porter, came to be defined as the strategy of a business unit which seeks to achieve sustainable Competitive Advantage (SCA). The literature on strategy deems the market-based view (MBV) and the resource –based view (RBV) as two approaches to giving businesses the competitive edge they need to compete in their industries. Aside from having competitive advantage as their ultimate goal, the two approaches are also similar in the sense that they both make use of particular tools and models in their undertakings. They also differ in numerous ways,

OE is not sufficient to explain and define strategy. Company and managers confuse OE for competition and run into trouble by only trying to focus and maximize OE. Firm’s loose their competitive advantage by focusing on growth and forget to focus on core competencies that gave them their competitive advantage in the first place. Companies should focus on strategy and the important contents of strategy. This starts at core

Competitive advantage is explained by Mahoney and Pandian (1992) as the function of industry analysis, organizational governance and the firm’s effects in the form of resource advantages and strategies. In order for a firm to be competitive it must adapt to the volatile business environment and through strategic management decisions establish a competitive advantage that will ultimately produce superior performance relative to its competitors (Akimova 2000).

An organisation bases its strategy according to its environment, and if implemented right will be successful. Firms can target their products by a broad target, thereby covering most of the marketplace, or they can focus on a narrow target in the market (Lynch, 2003). Michael Porter created a generic strategies framework in order for an organisation to gain a competitive advantage in their industry. Porter considers three generic strategies in his framework that an organisation can undertake to gain this advantage. He believes that an organisation falls into either cost leadership (lower cost) or differentiation and once applied in a broad or narrow scope, as discussed by Lynch, creates focus (Figure 1). Furthermore, some organisations undertake in more that one of these strategies and if unsuccessful is called the stuck-in-the-middle strategy. However, if the organisation combines elements of differentiation and elements of low-cost successfully, this becomes and hybrid option and is becoming increasingly popular amongst firms in the modern day.