Growth &

Ansoff Matrix

MAKING BUSINESS DECISIONS

Learning Objectives
 To understand and explain the Ansoff model for
strategic growth decisions
 To apply Ansoff matrix analysis to Toyota case
study
 GROWTH & ANSOFF MATRIX

Ansoff Matrix
A tool that is used by businesses to identify which, of a
number of options, a business could adopt to increase its
Definition:
sales. It is based on comparing the relative merits of selling
existing products and new products in existing markets and
new markets.
Depending on the aims & objectives of the business, and the strategy it
wants to adopt, Ansoff Matrix will suggest one of four options.

Learning Objectives
 To understand and explain the Ansoff matrix for
GROWTH &
ANSOFF MATRIX strategic growth decisions
 To apply Ansoff matrix analysis to Toyota case
study
MARKET PENETRATION

The starting point

 Requires relatively less investment
 Less risky
Why adopt this strategy?
 If the market is growing sufficiently to enable the business to increase its
own sales;
 If the business has no other options but to keep going with its existing
products;
 If direct competition is declining as businesses leave the market the gap
they leave can be filled with existing products;
 If the business is a strong market leader it can force competition out of the
market.

Learning Objectives
 To understand and explain the Ansoff matrix for
GROWTH &
ANSOFF MATRIX strategic growth decisions
 To apply Ansoff matrix analysis to Toyota case
study
MARKET PENETRATION

Achieving market penetration

Market
Penetration

Learning Objectives
 To understand and explain the Ansoff matrix for
GROWTH &
ANSOFF MATRIX strategic growth decisions
 To apply Ansoff matrix analysis to Toyota case
study
MARKET DEVELOPMENT

Raising the risk level

Strategy is to seek new channels of distribution for the product or to sell it in
different geographic areas.

Why adopt this strategy?

 If the product or brand is so strong that it will readily & easily find
acceptance & sales in new markets;
 If existing markets have reached saturation;
 Market research identifies that new markets are emerging & there is a need
for the existing product.

How can it be achieved?

Learning Objectives
 To understand and explain the Ansoff matrix for
GROWTH &
ANSOFF MATRIX strategic growth decisions
 To apply Ansoff matrix analysis to Toyota case
study
PRODUCT DEVELOPMENT

New products into existing markets

To be successful:
 confident name is strong to get its customers to buy the products that it
introduces;
 confident that new products will be as good as existing products
 confident that a market exists for the new products.
Why adopt this strategy?
 If have strong distribution & understanding of customers, confident that
product carrying its brand name will be successful in existing markets;
 If it is trading in a market where there is not many products, limited choice;
 It has a wealth of new product ideas;
 If it has a niche marketing strategy;
If it is operating in a market where the products have a very short life cycle.

Learning Objectives
 To understand and explain the Ansoff matrix for
GROWTH &
ANSOFF MATRIX strategic growth decisions
 To apply Ansoff matrix analysis to Toyota case
study
PRODUCT DEVELOPMENT

Achieving product development

PRODUCT
DEVELOPMENT

Learning Objectives
 To understand and explain the Ansoff matrix for
GROWTH &
ANSOFF MATRIX strategic growth decisions
 To apply Ansoff matrix analysis to Toyota case
study
DIVERSIFICATION

The highest risk strategy of all

This is a strategy that has been pursued by many businesses.

Why adopt this strategy?

 The product range & existing markets no longer offer any opportunity for
growth;
 When existing products or markets are declining;
 Opportunities for diversification are worth the risk;
 To spread risk – does not want to keep all of its eggs in one basket;
 Able to equally apply success to different products in different markets
How can we increase the chances of success?

Learning Objectives
 To understand and explain the Ansoff matrix for
GROWTH &
ANSOFF MATRIX strategic growth decisions
 To apply Ansoff matrix analysis to Toyota case
study
ANSOFF MATRIX

Draw the Ansoff Matrix for Toyota and suggest

specific strategies they could use to achieve all 4
options for growth.

10 minutes

Learning Objectives
 To understand and explain the Ansoff matrix for
GROWTH &
ANSOFF MATRIX strategic growth decisions
 To apply Ansoff matrix analysis to Toyota case
study
 Ansoff’s Matrix can be applied to Toyota, giving the
business a number of different strategic options
Existing Products New Products
Existing Markets

Market Product
Penetration Development

Expand organically and make cars

more fun
Develop more hybrid and eco friendly
cars
Expand by acquisition of a
competitor

Market
Diversification
New Markets

Development

Expand overseas (Asia) Develop “smart communities”