Business studies aqa, Schemes and Mind Maps of Marketing Business-to-business (B2B)

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AQA Alevel Business

3.8.1 1.Choosing strategic direction:

Ansoff’s Matrix

Lesson Objectives

• Understand what is meant by strategic direction.
• Identify the four strategies developed by Ansoff
• Describe the strategic planning process

The strategic planning process

Strategies based around

strengths

Long-term objectives – increase profitability

Coco-Cola – strategy of building brand loyalty through marketing

AstraZeneca – development and patenting new products

Apple – well designed products to suit customer needs

Ansoff’s Matrix

A strategic or marketing planning model that can be used to help a business decide its strategic direction in terms of its product portfolio and target markets.

(Risk becomes ever greater the further a business strays from it’s core of existing products/existing customers.)

RISK

PRODUCTS Existing New

RISK

MARKETS New

Existing

Ansoff’s Matrix – Four types of strategy: Diversification, Market development, Product development, Market penetration. Can you plot them in the correct quadrant?

tutor 2U Ansoff explained

Start detailed notes on each segment of the matrix

Market Penetration

Increase the sales of current products to existing customers.

How can you get more of the same customers? •Reduce Prices •Sales promotions •Advertising campaigns •Making small changes to products on offer (e.g. variety of sizes) •Increase buying options e.g. shop online

Market Development

Increasing sales of present products by selling to new markets

Assumes that new markets exist, which can be exploited profitably

More risky than penetration:

Involves one unknown Requires more extensive research

Product Development

Selling new product to present markets

R&D = high cost = risky

However, new does not mean brand new

Eg could involve:

▪ changing material, ingredients, colour ▪ adding new feature ▪ introducing new size ▪ improving functional performance

Diversification

Selling new products to new markets

The most risky – 2 unknowns, often requires considerable research and investment

However , can help spread risk – firm less vulnerable to changes in one market

Often adopted when: ▪ market saturated ▪ intense competition ▪ falling sales - other factors eg recession

Develop notes

Read page 487 Marcouse text book and develop your notes

Activity

Can you identify any businesses that have adopted a strategy of diversification?