IB Business & Management

1. IB Business & Management Ansoff and his Matrix

2. Topic objectives • Explain the value of Ansoff’s matrix as a decision making tool. • Apply the matrix growth strategies to a given situation

3. First a little something to get you thinking • Some might say this is Liam Gallagher (former Oasis frontman) looking back in anger, but has he finally found something worth living for? • What Business Studies ideas can you get from the up and coming clip?

4. Is it my imagination or is this Business Studies? • You’ll be mad for this one! Warning Very Strong Language!

5. So what did you get? • Reasons for starting a business? • Marketing strategies? • Niche Vs Mass? • Diversification? Which leads on to Ansoff and his matrix…

6. What is it? • A tool to help a business decide their product and growth strategy • N.B. It will not make the decision for you!

7. 2 sets of categories = 4 options • We look at either new or existing products and • New or existing markets He then gave a name to each of the four options this threw up.

8. Ansoff’s Matrix…

9. Market Penetration • Here we market our existing products to our existing customers. • This means increasing our revenue by, for example, promoting the product, repositioning the brand, and so on. • However, the product is not altered and we do not seek any new customers. • Often a low risk, low return option.

10. Market Development • Here we market our existing product range in a new market. • This means that the product remains the same, but it is marketed to a new audience. • Exporting the product, or marketing it in a new region, are examples of market development. • Medium risk/return

11. Product Development • This is a new product to be marketed to our existing customers. • Here we develop and innovate new product offerings to replace existing ones. • Such products are then marketed to our existing customers. • This often happens with the cars where existing models are updated or replaced and then marketed to existing customers. • Medium risk/return

12. Diversification • This is where we market completely new products to new customers. • This can be broken down into two further subsets

13. Diversification: related • Related diversification means that we remain in a market or industry with which we are familiar. • For example, a soup manufacturer diversifies into cake manufacture (i.e. the food industry). • The most risky option

14. Diversification Unrelated • Unrelated diversification is where we have no previous industry nor market experience. • For example a music company invests in the rail business.

15. How would you use it? • It helps companies put the options in the right box and then focus on what is the best for them • Try not to look at it as 4 categories, but as scale. • For example, it is never going to be exactly the same customers

16. Quick test to see if you’re awake • If you were Microsoft, where would you put the x-box in the matrix

17. Quick test to see if you are awake • If you were Apple, where would you put the i-phone?

18. School lunches • School lunches provided to the whole community • Nice example of……?