Julius B. Ramos Kim Edward S.

Santos
BSBA-2A

Activity 1.2

Creation of Ansoff Matrix. Choose any existing direct selling companies (e.g. AVON, Tupperware) and
create your own Ansoff Matrix by filling out the missing information below.

Name of your chosen direct selling company:

Existing Goods/Services New Goods/Services

Market Penetration Product Development
 Sell more apparel, shoes, accessories & 
Existing Markets

Natasha Beauty (Alcohol free beauty products)

personal care products  Partner brands (Lee, FUBU, Freego & etc.)
 Cleary pricing
 Speedy service and giving customers order
 Improved product packaging

Market Development Diversification

New Markets

 Launching online application  Adding different tools, home decors and

 Branches Abroad including Malaysia, Brunei & appliances in catalogue (Kitchen,
Hong Kong constructional & etc.)

RISK

 Market Penetration
Natasha concentrate on selling of everyone basic needs that generates profit to the dealer as well to the
company itself. Natasha’s extensive network of dealers makes good quality products of the latest fashion
accessible and affordable to people all over the country.

 Market Development
The product produce by Natasha is sold in 20 countries especially here in Philippines wherein boutiques,
department stores, even online. The brand expands every year to attract different markets. In addition,
this market development provided a stable base for the company and developed an image of a successful
international brand.
 Product Development
In terms of product development, annually Natasha updates its brand and builds his brand portfolio by
expanding to include other products such as Alcohol-free facial cleanser for sensitive skin, accessories,
handbags, time ware, and footwear from partner brands. Besides the improvement and quality product
packaging in this strategy is included.

 Diversification
The company went through an unrelated diversification strategy in order to bring further growth to the
growing organization in terms of market and product development. This helps the company to sustain in
bad times and the diversified business supports the original business if there is a decrease for a time
being in the original business of the company. This diversification is not a reason for success for the
company but it has definitely provided firm support for the purpose of keep growing with the confidence
and make strategic decisions.
Julius B. Ramos Kim Edward S. Santos
BSBA-2A

Activity 1.3

Research on Ansoff Matrix. Search for at least 2 fast food companies that utilized Ansoff Matrix and
add at least two recommendations to improve their strategies by filling out the missing information below

.
Existing Goods/Services New Goods/Services
Market Penetration Product Development
 Clever Pricing 
Existing Markets

McSpaghetti
 Drive Thru  McPizza
 Happy Meal
 McAloo Tikki
 Service Offered
 Royal Paneer
All of these in India since people do not eat beef

Market Development Diversification

New Markets

 Has presence in 121 countries and is planning  McCafe, McStops, McHotel(Switserland)

to open outlets in Nigeria, Tunisia, Armenia

RISK

 Market Penetration
McDonald’s applies several strategies to promote its existing products in existing markets. The company
offers various types of meals that contain combinations of products that include the main item, fries, and
a drink. One such example is the happy meal for kids. McDonald’s has also established drive-troughs for
its customers to create ease in the purchase. The company also offers home delivery to attract more
consumers and serve current consumers better. It also offers discounts on group purchasing. The
company also continues to improve the service it offers to its clients in terms of customer service quality
and quickness. McDonald’s also uses the strategy of clever pricing. In this strategy, everything is priced
ending at .99. It is also involved in aggressively promoting its products in existing markets through various
means such as newspaper ads, television ads, billboards, social media, and so on. Under each marketing
campaign, the intention is to motivate current customers to try other products on the menu or make
them come back for more.

 Market Development
McDonald’s develops its markets by launching its existing products in new markets. The main strategy
applied by McDonald’s is expanding into new geographic markets. The company already has thousands of
outlets in the United States and other markets. The company is present in 121 countries and has plans to
launch its outlets in Nigeria, Armenia, Tunisia, and various other nations (Tahilrahmani, 2014). This helps
 the company promote its existing products in new markets by allowing third parties to establish its
franchises serving its products and using its brand name. Further, the company launches customized
products based on market nature. For example, the McAlloo Tikkin in India and McArabia in Saudi Arabia.
This helps develop attraction by the consumers in these local markets. The company also reduces its
prices when entering new markets to help get established and boost the customer base from the start. In
all of these strategies, the company is able to enter new markets successfully and increase its revenues.

 Product Development
Product development refers to launching new products in the existing markets served by McDonald’s.
McDonald’s works hard for understanding consumer needs and then launching new products to satisfy
their taste buds. One such example is India. The majority of people in India don’t eat beef. McDonald’s
went around and launched an entire menu not having any item containing beef such as McAlloo Tikki,
McSpaghetti, McPizza, and Royal Paneer (Azam, 2017). The same has been done for many other nations.
Even in the United States, McDonald’s keeps launching new products in its desserts, drinks, and burgers
ranges. Oreo McFlurry and M&M’s McFlurry are two examples. All of these strategies help the company
launch and succeed with new products in its existing markets.

 Diversification
This is the riskiest strategy for McDonald’s. Rather than working on vertical diversification, the company
works on horizontal diversification. McCafe was established to compete with Starbucks and other coffee
houses. McStops is another venture by the company. McDonald’s has also established a hotel in
Switzerland called The Golden Arch Hotel. These are quite different from what the company is already
doing. Also, these are established to compete in industries McDonald’s was not a part of before.
However, these risky strategies will help McDonald’s succeed and grow their revenues and sales. The
company has various other plans in place as a part of its diversification strategy.
Market Penetration
The selling of goods and services in a specific market is considered as “Market Penetration”. KFC is
constantly struggling to improve the quality of its products in Brazil and Argentina. Therefore, a market
penetration plan may assist in doing the same through the categorization of old goods before a new
market. The establishment of various outlets in different regions of Brazil and Argentina would support
the market penetration strategy of KFC. An increase in the number of the franchise would increase the
market share and profitability of the company (Black, 2018).

Product Development
Production of new or different products or services that provide additional benefit to the customer is
called “Product Development”. The buying behaviour of the customers has been changed due to various
changes in the demography and lifestyle of the consumer. Although, KFC is required to focus on the
production of vigorous options by adding vegetables and free-calorie products to create variety.
Consumers are more conscious about their health that’s why they prefer to eat low-fat food. Therefore,
KFC must expand its product line that may help the company to grab new customers.“Try Healthy, Be
Healthy” campaign should be started to launch the latest products and services. In this manner, the
target market will be expanded that would increase sales growth (Cheverton, 2018).
In a product development approach, KFC may experience its hand through the production of various
kinds of burgers. It has been observed that MacDonald’s is more preferable than KFC due to a variety of
products like Spaghetti, Mc Pizza, and Masala Grill. In this situation, KFC is required to produce a variety
of burgers in terms of taste and ingredients. Product development plays a vital role in the growth of
market share because the introduction of new products attracts new customers that increase sales. For
example, MacDonald has developed kids-oriented products and schemes but KFC has not introduced
any product plan for a child audience. To grab the attention of customer’s at large extent, KFC may
introduce special morning breakfast and combos like MacDonald’s working already.

Market Development
It deals with the selling and production of goods and services in the new market by expanding its
geographical coverage. On the other hand, selling existing products into a new market at different costs
may also be considered as market development. The target audience of KFC is based on youth and
middle-class customers. However, the KFC to enhance its target audience needs to increase its
customers and establish its business in every region across the world to reach its customers at a global
level. An increase in the number of customers increases the firm’s profitability ratio and helps to recover
all previous losses (Black, 2018).

Diversification
Production of unique products and services to attain competitive advantage is called differentiation
strategy and the company needs to integrate all primary and supportive activities to develop an effective
diversification plan. To deal with strong market competition, large firms like KFC, Hardees, and
McDonalds are executing a diversification strategy to achieve competitive advantage. Over time, KFC has
managed to maintain its competitive edge through the production of different products. The unique
production of KFC has made it difficult for rivals to emulate. The company deals with chicken pieces,
sandwiches, salads, and wraps. Although, the main focus of the company is based on fried chicken. It
provides a large number of various chicken items. KFC has remained unique in the production of fast
food due to eleven herbs and spices. The development of an effective diversification strategy has helped
in the expansion of the firm’s customer loyalty (Bhasin, 2019).