IGOR ANSOFF’S PRODUCT/MARKET

EXPANSION GRID
Current Product New Product

Current
Market Product
Market
Penetration Development

New Market Diversification

Market Development
 IGOR ANSOFF’S PRODUCT/MARKET
EXPANSION GRID
• Current Market –Current Product

• Market Penetration:
Encourage current customers to buy more.
Attract competitors customers to switch to its brand
Convince non users who resemble current users to
start using the company’s product.
e.g --- Pepsodent, Colgate
• Market Development

Geographical expansion: Opening retail outlets in

other areas.
e.g --- Mc-Donalds, Shoppers’ Stop

Channel expansion : If only present in consumer

market, then look at institutional sales also.
 IGOR ANSOFF’S PRODUCT/MARKET
EXPANSION GRID

• Product development Strategy :

Introduce products with new features
Introduce different quality versions
Alternative product forms
e.g – LG in colour TVs– Flat TVs, Plasma TVs,
LCD TVs, Projection TVs.
• Diversification Strategy
 BCG matrix- Growth/share matrix

20
Market

STARS Question
Marks
Growth
10
Dogs
Rate (%) Cash
cow
0 x
10x 0.1 x
Relative Market share
 Business Strength M
GE MODEL
A
Protect Position Invest to build Build Selectively R
    Specialize around
K
Invest to grow Challenge for limited strengths
Seeks ways to E
Concentrate effort leadership
overcome weakness T
High on maintaining Build selectively
Withdraw if
strength Reinforce indications of sustain
A
vulnerable areas growth is lacking T
   
Build Selectively Selectivity/Manage Limited Expansion T
  for earnings or Harvest R
Medium Invest heavily in most    
A
attractive segments Protect existing program Look for ways to
Build up ability to Concentrate investments expand without high C
counter competition in segments where risk ,Otherwise
Emphasize profitability T
profitability is good and minimize investment
by raising productivity risks are relatively low and rationalize I
operations
Low Protect and Refocus Manage for Divest V
  earnings  
E
Manage for current   Sell at time that will
earnings Protect position in most maximize value N
Concentrate on profitable segments Cut fixed costs and
E
attractive segments Upgrade product line avoid investment
Defend strengths Minimize investment meanwhile S
S

Strong Medium Weak

 GE Model
• Market Attractiveness:
Overall Market size
Annual Market growth rate
Historical profit margin
Competitive intensity
Technological requirements
Energy requirements
Inflationary vulnerability
Social/ political / legal
 G E MODEL

Business Strength
• Market share
• Share growth
• Product quality
• Brand reputation
• Distribution network
• Promotional effectiveness
• Productive capacity
• Productive efficiency
• Unit costs
• R & D performance
• Managerial personnel
• Risks of Focus

 The cost differential between broad range competitors and the

focused firm widens to eliminate the cost advantages of
serving a narrow target or to offset the differentiation achieved
by focus.
 Differences in desired products or services between the
strategic target and the market as a whole narrows.
 Competitors find submarkets within strategic target and
outfocus the focuser.