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

Explain how the Ansoff intercellular substance contri simplye be use to succor develop strategicalalal shoping options for an enterprise. What another(prenominal) analyticalal scratchs and techniques tin be absorbed to develop alternative foodstuff strategies? T equal to(p) of contents 1. macrocosm 2. The Ansoff Matrix 3. food foodstuff Penetration 4. harvest-tide organic evolution 5. grocery store place Development 6. variegation 7. Limitations of the Ansoff ground substance 8. Other analytical tools and techniques 9. completion 10. References IntroductionFrom my casting experience I ca-ca disc overed, an judicature that knows its shortcomings, and brook gear up coitionly strategic decisions to recreate the even up objectives, impart achieve its desire to stick successful and remain relevant. Successful brass sections in Nigeria al slipway attribute their success to remarkable strategies which they employed efficiently. Strategies ar developed at unalike levels inside an organisation, it thitherfore follows that objectives (what it wants to achieve) atomic number 18 as well as set at the different levels.The circumstance of these objectives go out usu on the wholey claim a discrepancy surrounded by what is before long being achieved and what needs to be achieved. merchandise strategies atomic number 18 the explanation of how this gap is passing to be closed and the objectives realized. Ansoff matrix is a useful textile for looking at possible strategies to reduce the gap between where the play along whitethorn be without a assortment in schema and where the troupe aspires to be (Proctor, 1997).The Ansoff matrix which is the localise of this work is nonpargonil of the models on base others like the doorman matrix, BCG, attire, PESTEL, DPM matrix and Gap digest and so on utilize by marketplace placeers to set objectives which assist strategic decision fashioning. The Ansoff matrix is also use in m arketing audits (Li et al, 1999). I will act to explain in spite of appearance the restriction of word content, how the Ansoff brush off 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 se dismisst section this work. The Ansoff Matrix The Ansoff matrix presents the carre quadruple and market choices acquirable to an organisation. Herein markets whitethorn be defined as nodes, and crossroads as items sold to customers (Lynch, 2003). This matrix helps companies decide what operate of action should be taken presumption latest performance. The Ansoff matrix is also apply in marketing audits (Li et al, 1999).The Ansoff matrix entails cardinal possible crop/market combinations securities industry incursion, product training, market victimization and variegation (Ansoff 1957, 1989). Ansoff produce-Market Growth Matrix pic blood line Ansoff (1957, 1989) A market pe netration system is employ when and geological formation wants to achieve and pro tickd circumstances in the market. A market discipline outline in contrast involves the organization searching for sunrise(prenominal) markets in which to sell its current product.A product breeding schema involves noticeing untested needs within the actual market and ontogeny products to meet these needs piece of music the variegation system involves the organisation entering untried markets with brisk-sprung(prenominal) products. I will now figure on these quaternion strategies to show how they help develop strategic marketing options for an enterprise. Market Penetration Market penetration occurs when a club penet grade a market with its current products.It is e very(prenominal) last(predicate)-important(a) to ob advert that the market penetrations schema begins with the existing customers of the organization. This strategy is utilize by companies in clubhouse to increa se sales without drifting from the superior product-market strategy (Ansoff, 1957). Companies a lot penetrate markets in single of these terzetto ways by gaining competitors customers, improving the product quality or level of service, disemboweling non-users of the products or convincing current customers to use more than(prenominal) of the political partys product, with the use of marketing communication tools like advertising etc. Ansoff, 1989, Lynch, 2003). This strategy is important for problemes because bear oning existing customers is cheaper than attracting reinvigorated unitys, which is why companies like BMW and Toyota (Lynch, 2003) and banks like HSBC take in in relationship marketing activities to retain their high lifetime harbor customers kindred applies to Diamond bank in Nigeria which win the award for Bank of the Year in Thisday Awards 2009 (Thisday Style magazine).Diamond bank is one and only(a) of the market ch aloneengers in Nigerias banking ap plication and has consistently increased its market dole out by penetrating the market with posted fussy promotions, very low interest rates on loans, and maintaining a highly overt and comfortable atmosphere in its banking halls. Product Development Product culture occurs when a political party develops sensitive products catering to the uniform market. zero(prenominal)e that product development refers to crucial rawfangled product developments and not minuscule kinds in an existing product of the firm.The reasons that explain the use of this strategy take on one or more of the following to utilise of excess production capacity, counter militant entry, maintain the federations report card as a product innovator, effort new technology, and to protect overall market shargon (Lynch, 2003). Often one much(prenominal) strategy moves the company into markets and towards customers that are before long not being catered for. For example, McDonalds is always within the fast-food industry, but frequently markets new burgers.another(prenominal) good example of the product development strategy is the constant innovation within the home computer market where products deal become obsolete within a matter of years. Frequently, when a firm creates new products, it can gain new customers for these products. Hence, new product development can be a crucial transaction development strategy for firms to stay belligerent. Market Development When a company follows the market development strategy, it moves beyond its immediate customer rest home towards attracting new customers for its existing products.This strategy ofttimes involves the sale of existing products in new international markets. This may entail exploration of new segments of a market, new uses for the companys products and services, or new geographic areas in order to entice new customers (Lynch, 2003). For example, Arm &038 Hammer was able to attract new customers when existing consumers id entified new uses of their baking soda (Christensen et al, 2005). Lucozade was first marketed for put off off children and then re- pocked to keister athletes.Also, an organisation lay down that the gel they produced for removing residual oil from overburdened machinery could also be used to easy domestic ovens and baking tins. This revelation enabled them to target a new market of lord cooks and baking enthusiast. These are good examples of developing a new market for an existing product. Diversification Diversification strategy is explicit in the sense that when a company diversifies, it essentially moves out of its current products and markets into new areas. It is important to note that diversification may be into related and unrelated areas. cogitate diversification may be in the form of backward, forward, and horizontal consolidation. Backward integration takes place when the company extends its activities towards its inputs much(prenominal) as suppliers of raw mater ials etc. in the same occupation. Forward integration differs from backward integration, in that the company extends its activities towards its outputs such as diffusion etc. in the same business. plane integration takes place when a company moves into businesses that are related to its existing activities (Lynch, 2003 Macmillan et al, 2000).It is important to note that even unrelated diversification very much has some synergy with the original business of the company. The risk of one such manoeuvre is that detailed knowledge of the discover success factors may be throttle to the company (Lynch, 2003). While diversified businesses search to grow meteoric in cases where diversification is unrelated, it is crucial to note that the track volume of diversification remains poor as in many cases diversifications ache been divested ( usher, 1987).Scholars study argued that related diversification is generally more get aheadable (Macmillan et al, 2000 Pearson, 1999). Therefore, diversification is a high-risk strategy as it involves taking a step into a territory where the parameters are unknown to the company. The risks of diversification can be minimised by moving into related markets (Ansoff, 1989). gross(a) poop, everlasting(a) Megastores, utter(a) Airlines, unadulterated Telecommunications are examples of new products created by the Virgin sort out of UK, to leverage the Virgin brand.This resulted in the company entering new markets where it had no charge before. Limitations of Ansoff Matrix While Ansoff abstract helps in mapping the strategic options for companies, it is important to note that like all models, it has some limitations. By itself, the matrix can tell one part of the strategy story but it is imperative to look at other strategic models like elevate digest and PESTLE in order to go through and through how the strategy of an organisation is formulating and might change in the course of its upcoming.For example, the Ansoff anal ysis of Virgin gage shows that the brand has been launched in the UK and regular army using a market penetration strategy, which essentially reflects that the brand needs to increase its brand recognition (Vignali, 2001). The trick out analysis conducted by Vignali (2001) showed an opportunity that Virgin Cola could explore diversification into new ranges of Virgin Cola products.PESTEL analysis of Virgin Cola showed that in that respect was need to constantly rate the soft drinks industry in all countries, in order to reflect customer trends, thereby allowing the brand to gain market share and also predict trends faster than the competition. Therefore, the steps to be taken piece conducting a strategic analysis of an organisation include elevate analysis, PESTEL and Ansoff matrix as fundamental models of analyses, which should be used in conjunction and not in isolation, to keep an eye on the complete strategic scenario.Also, recommendations made on the basis on only one of the models are not concrete and lack in depth. While the role of analysis in making strategic choices cannot be undermined, it is imperative to note that judgment plays a crucial role in making particular strategic choices that may change the future of the firm (Macmillan et al, 2000). Lastly, the use of Ansoff matrix as a marketing tool may not be authentically useful as the matrix is critical for analysing the strategic path that the brand may be following, and does not essentially identify marketing options. Other Analytic ToolsAs mentioned earlier Ansoff matrix is not all exhaustive and so there are other analytical tools and techniques which are worthy to marketers for strategic decision making and can actually be used alongside Ansoff matrix. I will just throw some light on attire, BCG matrix and Porters generic Strategy. SWOT Swot analysis is a unsophisticated framework for generating strategic alternatives from a billet analysis. Swot (sometimes reffered to as TOWS) s tands for Strengths, Weaknesses Opportunities and Threats. It is applicable to any corporate level or business unit level and frequently appears in marketing lans. Its advocates say it can be used to gauge the degree of fit between the organisations strategy and its environment, and to suggest ways suggest ways in which the organisation can profit from strengths and opportunities and shield itself against weaknesses and threats (Adams, 2005). The internal and impertinent bit analysis can produce a large amount of entropy, much of which may not be highly relevant. The SWOT analysis can serve as an interpretative filter to reduce the information to a manageable quantity of signalize issues.The SWOT analysis classifies the internal thought of the company as strengths or weaknesses and the external situational factors as opportunities or threats. Strengths can serve as a foundation for construction a belligerent wages, and weaknesses may hamper it. By understanding these four a spects of its situation, a firm can better leverage its strengths, correct its weaknesses, capitalize on fortunate opportunities, and deter potentially devastating threats. Because SWOT is such as familiar and comforting tool, many students use it at the belong of their analysis. This is a mistake.In order to fetch at a proper SWOT appraisal, other analyses need to be holder out first. BCG Matrix BCG matrix is a management tool that serves four obvious purposes (McDonald 2003 Kotler 2003 Cipher 2006) it can be used to classify product portfolio in four business sheaths found on four graphic labels including Stars (Stars are leaders in high festering markets. They tend to/should recall large amounts of immediate payment but also use a lot of interchange because of growth market conditions) Cash kine (), Question Mark (Question Marks have not achieved a dominant market position, and hence do not relent much silver.They tend to use a lot of cash because of growth market c onditions) and Dogs (Dogs very much have little future and are big cash drainers on the company as they generate very little cash by justness of their low market share in a highly low growth market). pic According to experts (Drummond &038 Ensor 2004 Kotler 2003 McDonald 2003), surplus cash from cash cow products should be channeled into Stars and Questions in order to create the future Cash Cows.The BCG matrix can be used to square what priorities should be tending(p) in the product portfolio of a company to classify an organisations product portfolio according to their cash usage and generation and offers management available strategies to tackle various product lines. It is based on two dimensional variables relative market share and market growth. They often are pointers to healthiness of a business (Kotler 2003 McDonald 2003). In other words, products with great market share or within a fast growing market are expected to wield relatively greater profit margins.Porters Gen eric Strategy Companies can achieve competitive advantages essentially by differentiating their products and services from those of competitors and through low courts. Firms can target their products by a broad target, thereby covert most of the marketplace, or they can heighten on a narrow target in the market (Lynch, 2003). According to Porter, there are three generic strategies that a company can undertake to chance upon competitive advantage cost leadership, differentiation, and nidus. pic Source Porter (1985)Cost Leadership The companies that attempt to become the low-cost producers in an industry can be referred to as those following a cost leadership strategy. The company with the lowest costs would earn the highest profits in the event when the competing products are essentially undifferentiated, and change at a standard market price. Companies following this strategy place tension on cost reduction in every activity in the value chain. Differentiation When a company differentiates its products, it is often able to charge a pension price for its products or services in the market.Some general examples of differentiation include better service levels to customers, better product performance etc. in equivalence with the existing competitors. Porter (1980) has argued that for a company employing a differentiation strategy, there would be extra costs that the company would have to incur. Such extra costs may include high advertising consumption to promote a differentiated brand image for the product, which in fact can be considered as a cost and an investment. Focus Porter initially presented commission as one of the three generic strategies, but later identified center on as a moderator of the two strategies.Companies employ this strategy by focusing on the areas in a market where there is the least amount of competition (Pearson, 1999). Organisations can fetch use of the focus strategy by focusing on a specific niche in the market and offer ing specialised products for that niche. This is why the focus strategy is also sometimes referred to as the niche strategy (Lynch, 2003). Therefore, competitive advantage can be achieved only in the companys target segments by employing the focus strategy. The company can make use of the cost leadership or differentiation approach with regard to the focus strategy.Conclusion In conclusion, it has to be restated that the Ansoff matrix is a useful, though not an exhaustive, framework for an organisations objective setting process and marketing audits. The differences in strategic choices of organisations can often be attributed to the type of market in which the company operates. Changes in business environment play a crucial role in the strategic options that an organisation may pursue over its life stages. There are risks associated with all of the four strategic options entailed in the Ansoff matrix.Market penetration is generally considered as a low risk strategy while diversific ation, on the other hand, is deemed as a high risk growth strategy as it involves moving simultaneously into new products and new markets. Diversification remains a popular strategic option for firms in todays competitive business arena. Lastly, Ansoff matrix as a strategic model has certain limitations. The use of SWOT and PESTEL analysis is recommended, along with Ansoff analysis, to be able to capture a holistic behold of the strategic scenario of an organisation.I would have exposit more on other analytic tools but for the word limit given me. 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