Ansoff is everywhere

Some recent examples of Ansoff’s model in action

One of the reasons why I love Business Studies is because it is a ‘real life’ subject. At open evenings and school visits I often use this as a reason to study the subject…the fact that the theories and techniques are ones that businesses really use, and that knowledge can be applied to real news stories and events that are in the news and on TV all the time. A perfect example of this is the Ansoff Matrix. Yes, this is a ‘theory’ and you can find many detailed explanations of it in textbooks or websites and even here on the tutor2u website, but there are always examples of businesses using the model in action. I have noticed many of these appearing on twitter from various sources lately, and felt compelled to share some ‘real-life’ Business Studies with you all!

Market Penetration

The Ansoff matrix explains this strategy as attempting to grow by selling more of existing products to existing customers. This is seen as the least risky of all Ansoff strategies as the business is already familiar with the needs of this market, and of course knows the products well. A great example of this was tweeted by Edgbarrow Business Studies (@EdgbarrowBS) here . Cadbury have launched a ‘Screme Egg’ which is basically a Crème Egg with a strange coloured yolk and a Halloween theme. Quite clever marketing I think from Cadbury, and a way to make us buy more of their existing products with low risk and investment from the business.

Product Development

Targeting a new product at existing customers is one of the most common strategies a business opts for of course. Customer needs change, and businesses exist to find out what these changes are and supply us with products that meet those needs. There is an element of risk here of course as there is likely to be large R&D costs, but the risk is reduced by the fact that the business knows their market and should be familiar with customer needs. Apple however specialise in telling us what we need before we even know that we need it! The imminent launch of the iPad Mini is a great example of this, and of this Ansoff strategy in action.

Market Development

Targeting products at overseas markets (especially emerging markets ) is another news story we hear about all the time. @Downsbusiness tweeted an example recently of Tesco planning to target India. In terms of risk, I am sure Tesco will find some differences between the market in the UK and their new customers in this example.

Diversification

I spotted this article from the NME about Primark deciding to sell Music CDs in their stores. This is certainly a departure from their usual fast-fashion clothing range and although there is clearly a link between fashion and music buyers, Ansoff would describe this as a new market for them. In most cases, diversification is the most risky of all Ansoff strategies as the business is not familiar with either the product or the market. Given the decline in CD sales, this may be even more of a risk for Primark. Only time will tell!

Ansoff is everywhere!!