A common tool used within marketing was developed by Igor Ansoff in 1957.
His model gives organisation five strategic business options.
1. Market Penetration: This involves increasing sales of an existing product
and penetrating the market further by either promoting the product heavily
or reducing prices to increase sales.
2. Product Development: The organisation develops new products to aim
within their existing market, in the hope that they will gain more custom
and market share. For Example Sony launching the Playstation 2 to replace
their existing model..
3. Market Development: The organisation here adopts a strategy of selling
existing products to new markets. This can be done either by a better understanding
of segmentation, i.e who else can possibly purchase the product or selling
the product to new markets overseas.
4. Diversification: Moving away from what you are selling (your core activities)
to providing something new eg Moving over from selling foods to selling cars.
5. Consolidation: Where the organisation adopts a strategy of withdrawing from particular markets, scaling back on operations and concentrating on its existing products in existing markets.
Case study on Amway from www.thetimes100.co.uk
