An example of working with the ansoff matrix. Boston model of the matrix "Market share - market growth"

10.10.2019

Introduction…………………………………………………………………….……...2 p.

1. The matrix of I. Ansoff and the matrix of D. Abel………………………………………3 pp.

2. Model Market share - market growth (portfolio analysis, Boston Consulting Group (BCG) matrix) …………………………………………………..……….6 p.

3. Matrix ADL (ADL) …………………………………………………........... 11 p.

4. Model Market attractiveness – competitive advantage (McKinsey and General Electric (GE) matrix) ……………………...………………..…....13 p.

5. Classical models of strategic analysis and planning: HOFER/SCHENDEL model…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

6. Shell Directed Policy Matrix………………………………………………………………………………………………………………………….

Conclusion……………………………………………………………………………..22 p.

References………………………………………………………………………………………23pp.

Introduction

Development marketing strategy- a complex process, one of the methods, the formalization of which is modeling with the help of matrices, which allows choosing the best option for a strategic decision, avoiding the dispersion of forces and means.

Marketing Strategy Matrix - this is a model for choosing a certain strategy by a firm depending on the specific market conditions and its own capabilities or other factors.

The matrix is formed according to two characteristics (factors) using a system of horizontal and vertical coordinates of the economic space, which express the quantitative or qualitative characteristics of the relevant market parameters. Their intersection forms fields (quadrants, strategic sectors) that reflect the firm's position in the market. Matrices, as a rule, have a double name: by the content and by the name of the developer (company name). As you know, the strategic matrix in marketing is a spatial model that reflects the company's position in the market, depending on the combination of two (or more) factors. The first experience of using matrices in strategic marketing planning was the model proposed in 1957 by the American researcher I. Ansoff. In the future, the idea embodied in it was developed and improved by many other researchers. Now there is, perhaps, not a single decent textbook on marketing, where, as one of the basic tools for strategic analysis and planning, the famous Boston Consulting Group (BCG) matrix would not be mentioned, which makes it possible to develop adequate strategies for groups of strategically important business units companies. The commonly recognized advantages of this tool include the following:

1. Identification of the most important system of coordinates “Market share - Market growth” in terms of market success.

2. Internal integration of significant theoretical and empirical marketing concepts (product life cycle, learning curve).

3. Very good way visualization of the relative position of strategic business units (SHP) in the space of base coordinates. 4. Accurate and memorable names of the main categories of SHP.

1. I. Ansoff matrix and D. Abel matrix

I. Ansoff's product/market development model (Ansoff's matrix) allows using several strategies simultaneously. It is based on the premise that the most appropriate strategy for intensive sales growth can be determined by the decision to sell existing or new products in existing or new markets. This Ansoff matrix is a chart designed to help managers make strategy decisions and also serves as a diagnostic tool. Igor Ansoff's matrix is intended to describe the possible strategies of an enterprise in a growing market.

On one axis in the matrix, the type of product is considered - old or new, on the other axis - the type of market, also old or new.

Table 1. Ansoff matrix.

Strategy for improving performance (market penetration). When choosing this strategy, the company is recommended to pay attention to marketing activities for existing products in existing markets: conduct a study of the target market of the enterprise, develop measures to promote products and increase the efficiency of activities in the existing market.

Product Expansion (Product Development) is a strategy for developing new or improving existing products in order to increase sales. A company can implement such a strategy in an already known market by finding and filling market niches. Income in this case is provided by maintaining market share in the future. Such a strategy is most preferable in terms of risk minimization, since the company operates in a familiar market.

Market development strategy. This strategy is aimed at finding a new market or a new market segment for already mastered goods. Income is provided through the expansion of the sales market within the geographic region, and beyond it. Such a strategy is associated with significant costs and is more risky than both previous ones, but more profitable. However, it is difficult to enter new geographic markets directly, as they are occupied by other companies.

The diversification strategy involves the development of new types of products at the same time as the development of new markets. At the same time, goods can be new for all companies operating in the target market or only for this business entity. Such a strategy provides profit, stability and sustainability of the company in the distant future, but it is the most risky and costly.

The advantages of using planning according to the I. Ansoff matrix are visibility and ease of use. The disadvantages of using planning according to the I. Ansoff matrix are a one-sided orientation to growth and restrictions in the context of two characteristics (product - market).

The D. Abel matrix, in fact, corrected the shortcomings of the model proposed by I. Ansoff. Abel proposed to define the field of business in three dimensions:

Customer groups served;

Buyers' needs;

The technology used in the development and production of a product.

rice. 1. The field of possible strategies (according to D. Abel).

First the most important criterion The Abel matrix score is the alignment of the industry in question with the overall direction of the company, in order to exploit synergies in technology and marketing. Other selection criteria are the attractiveness of the industry and the "strength" of the business (competitiveness).

The choice of strategy depends on the resources of the enterprise and the willingness to take risks.

2. Model Market share - market growth (portfolio analysis, Boston Consulting Group (BCG) matrix)

In the early seventies the famous consulting firm The Boston Consulting Group (BCG) developed a portfolio management framework known as the "BCG Matrix".

The appearance of the BCG model was the logical conclusion of one research work carried out at one time by the specialists of the Boston Consulting Group.

In a study of various organizations producing 24 major products in seven industries (electricity, consumer durables, consumer nondurables, plastics, gasoline, non-ferrous metals, electrical equipment), empirical evidence was found that when Doubling the volume of production variable costs per unit of production are reduced by 10-30%. It has also been found that this trend occurs in almost every market segment. These facts became the basis for the conclusion that variable production costs are one of the main, if not the main factor in business success and predetermine the competitive advantages of one organization over another. Statistical methods were used to derive empirical dependencies that describe the relationship between the costs of producing a unit of output and the volume of production.

One of the main factors competitive advantage, low production costs, was put in one-to-one correspondence with the volume of production, and, consequently, with what market share of the corresponding products this volume occupies.

The publication of the results of a study conducted by BCG experts literally "blew up" America. Experimental cost-volume curves were for some time the main subject of discussion at the headquarters of most organizations. Realizing that the empirical conclusions drawn are favorably perceived by the business community, BCG has built a model based on the empirical dependence of costs and production volume that allows drawing strategic conclusions about the state and nature of the development of specific types of business. This model is very fast.

received recognition from the business community, and by 1970, the BCG approach was used in more than 100 organizations. In the late 70s, it was already noted that the BCG concept is becoming vital for organizations that want to achieve something.

The model is based on the concept of the product life cycle and on the concept of the experience curve, justifies the product portfolio of a large firm. Different commodities have different market chances and risks. Portfolio analysis is one of the most commonly used strategic marketing tools today.

ANSOFF MATRIX

The Ansoff matrix offers four strategies for increasing sales (Fig. IV. 1).

Quadrant 1. Increasing sales of existing products in previously developed markets is a safe strategy for increasing market share. For this strategy to be effective, the means to achieve the goal must be clearly established, such as increasing the sales force, intensifying the advertising campaign, or lowering prices.

Quadrant 2. Development of new or modification of existing products in order to sell them in existing markets. This is an excellent strategy, but only for firms with a wealth of experience in new product development, and also provided that new and existing products will have significant total costs and will use the same skills in their production and, in addition, new products will not face very strong competitors in the market.

Quadrant 3: Selling existing products to new markets or new customers. This is a reasonable strategy only if new markets can be developed at relatively little additional cost. If the new market requires investment in fixed costs (for example, additional sales staff), or the product does not meet the needs of consumers, or there are strong competitors in the market, then this step can be very risky.

Quadrant 4. New products in new markets. The most risky strategy: the market segments that the company enters are not adjacent to the existing business, which means that you have to start from scratch. There is an opinion that Quadrant 4 strategies are inherently flawed and should only be used as a last resort or when there is a very attractive opportunity that has not yet been noticed by others.

Boston Consulting Group (BCG) (BCG) has created several types of matrices, but this Growth/Market Share matrix is the most famous. It was developed in the 1960s. but is still relevant. It reflects the dynamics of market growth and the relative market shares of all business units of a particular company. It is very important to correctly determine the coordinate axes in Fig. IV.2).

The horizontal axis of the matrix plots the market share that a company has in a particular business area relative to the share of its largest competitor. So, for example, if company 1 owns 40% of the market for business A, and the nearest pursuer owns 10%, ODR k.1 is equal to 400%, or 4,0x. If in business B k. 1 owns 5% of the market, and the market leader owns 10%, then in this case ODR k.1 is equal to 50%, or 0.5x. Please note that absolute market share (for example, 20% of the market), taken by itself, does not say much, because it can correspond to an ODR equal to 0.33% (if the market leader has a share of 60%), or an ODR of 10, Oh (if the market is highly fragmented and the nearest competitor owns only 2%).

The vertical axis of the matrix plots the market growth values for each area of the company's activities. There is controversy over the exact definition of this market growth rate. More correctly, the vertical axis can be defined as the expected future annual growth rate (over the next five years) in the volume of production (product units) of the market as a whole, and not just of a particular business of company 1.

It should be explained why the creators of the BCG matrix believe that the chosen axes of the matrix (relative market share and market growth rates) are essential characteristics of the company's activities. Relative market share is fundamental because a company's larger business unit compared to its competitors (having a high ODR, greater than 1.0x) must either have lower costs, or higher prices, or both, and therefore , it must be more profitable than its competitors in the business, which have a smaller market share.

This thesis, with some exceptions, is confirmed by practical data: a unit that produces a significant share of the total product on the market has the ability to distribute fixed costs over the corresponding number of its units and, therefore, has lower unit fixed and overhead costs. A manufacturer with a significant market share may charge above average prices because either trademark better known to the consumer, or he has established distribution channels, or simply because his products are preferred by the majority of consumers. And since the price of the product minus the cost is profitable, the competitor with the higher market share must have a higher profit or else capitalize its advantage in the form of an additional benefit to buyers, which will increase its advantage in market share.

It should be emphasized that a competitor with a higher market share should have lower costs or higher prices for their products, but practice does not always confirm theory. A firm may recklessly squander potential opportunities, for example by inefficient cost sharing with unprofitable products or by providing a lower level of service than competitors. If the situation in the market is such that the participant with the largest market share is by no means the most profitable company, then the competitive situation here can be characterized as unstable, creating both favorable opportunities and threats in this market. In some cases, having a significant market share does not bring any significant benefits, even potential ones. Compare, say, the situation of a self-employed plumber and a company of ten of his colleagues: labor costs are about the same in both cases.

There is also an opinion that the role of market share and the value of the Growth / Market Share matrix are overestimated, and that practice gives us many examples of when a big business is less profitable than a small one or when there is no significant difference in the profitability of companies whose scale of production differ greatly. A closer look, however, reveals the following: it is indeed possible to identify a limited number of business segments in which the rule of obtaining real benefits from increasing the scale of production, all other things being equal, does not apply. Pay attention to the final words of the previous phrase - "ceteris paribus." Relative market share is far from the only factor affecting a company's profitability. No one will deny that its contribution can outweigh the skills of competitors in the field of production, the successful strategies that guide them, or various random factors that affect the company's profitability.

One of the main reasons for the lack of connection between having a larger market share and the level of profitability is the incorrect definition of the business segment. Before measuring market share, a clear distinction must be made between businesses. A market participant operating in a specific market niche and focusing on a limited number of products or a limited group of buyers is likely to operate in only one segment. A manufacturer of a wide range of products will operate in several segments and may not have significant influence in each individual segment, despite the fact that it appears to have a significant market share as a whole. For example, a company with a national supermarket chain may be larger than its competitors with regional chains, but the basis of the competitive advantage may be the scale of operations in a particular region and the preference given to them by customers. See: BUSINESS SEGMENT and SEGMENTATION on the importance of correctly defining business segments. With the correct definition of the boundaries of the business segment, it turns out that a competitor with a larger market share, at least nine times out of ten, has undeniable advantages. Thus, the more to the left a certain business is located in the BCG MATRIX, the stronger it should be.

What is the vertical axis of the matrix - market growth rates? The BCG argues that the difference between slow growing and fast growing (demand increasing by more than 10% per year) markets is significant. The faster the market grows, the more opportunities for the company operating on it to increase its market share. This is logical. First, more new industries are opening up, which are great targets for takeover. Second, competitors are always especially jealous of their absolute market share (in order to prevent a decline in turnover), less sensitive to changes in relative market share, which in a rapidly changing market they may not even notice. Let's move on to the characteristics of the four quadrants of the BCG MATRIX (see Fig. IV.3).

In the lower left quadrant of the matrix are the MONEY COWS (which in early versions were called gold mines, a much more appropriate name), extremely valuable lines of business for any company that must be preserved by all means. They have a high relative market share (by definition they are market leaders) and therefore must be profitable. “Cows” give owners money in “buckets” that can either be reinvested, or used to finance other businesses, or to buy a new business, or, finally, distributed in the form of dividends to shareholders.

In the upper left quadrant are the STARS, business units with a high relative share in fast growing markets. On the one hand, they bring high profits, on the other hand, significant investments of funds are required to maintain their positions. It is not recommended to skimp here, but all necessary measures should be taken to maintain the won market positions. If the "star" maintains its relative market share, then when the market growth slows down, it will turn into a "cash cow" and will be very valuable for a long time to come.

In case of loss of market share, as happens with the "stars" with insufficient attention to them, they move into the "DOGS" category and bring relatively little profit. The upper right quadrant of the matrix is occupied by "QUESTION MARKS" (sometimes called "wild cats"), business segments with a low relative market share, but operating in rapidly growing markets. The future of the question mark is naturally in doubt, and the decision to invest in it is both important and difficult. If the "question mark" does not increase its relative market share, i.e. will remain in the role of a follower, he will end his existence in the category of “dogs”. On the other hand, if you manage to take advantage of the volatility that comes from the growth of the market, and the investment in the “question mark” brought it to the leading position, then this business will go into the category of “stars” and end up as a “cash”. cows (very profitable business with high positive cash flow). The problem, however, is that "question marks" very often turn into "money traps", as investments are made without any guarantees (and sometimes with a high probability) that it will not be possible to capture a leading position. Significant investment in a business that never becomes a market leader is a waste of money overhaul building for demolition.

The lower right quadrant - "dogs" - represents a business with a low relative market share in a slowly growing market. The theory says that they are not capable of becoming profitable and most likely will never be able to gain a market share that would allow them to move into the category of "cash cows". Since most firms' business units fall into this category, this is not a very optimistic view.

In fact, the weakest point of the BCG theory is related to "dogs", mainly because of the fatalism of the BCG regarding their future. "Dogs" can often become a very valuable part of a company's business portfolio, they may move into the category of "cash cows" as a result of business resegmentation or simply due to a better response compared to the market leader to customer requests. Even if leadership is impossible to achieve, it usually makes sense to improve your position by being in the “dog” category as well. A business with a relative market share of 0.7x (70% of the market leader's share) can be quite profitable, generate significant positive cash flow, and be completely different from a business with a relative market share of 0.3x (30% of the market leader's market share). Of course, one must still agree that the possibilities of maneuvering with "dogs" are very limited, and they, as a rule, are much less attractive than "stars" and "money cows".

BCG coupled the Growth/Market Share matrix with cash flow management theory (sometimes called portfolio management theory), resulting in a useful construct, although not without flaws. This theory illustrates the features of cash flows in each of the quadrants of the matrix (see Figure IV.4). The BCG theory proposes the following sequence of use of funds, the options are numbered from 1 to 4 according to their priority:

1. best use cash is the support of "cash cows". They do not often need cash, but if investment is required to build a new factory or upgrade technology, then they should be carried out without stint.
2. Next in line are the stars. They need significant investment in order to maintain (or increase) relative market share.
3. Trouble begins when funds received from "money cows" are invested in "question marks". In some bad interpretations of the BCG theory, special attention was paid to justifying the expediency of these particular investments. The BCG responded by emphasizing that investing in question marks should be strictly selective, limited to supporting only those areas that have a real chance of gaining market leadership.
4. Least priority is investment in "dogs", for which the BCG advises that they be minimal or even negative. Perhaps, a more flexible and differentiated approach is required here when forming the company's investment strategy.

However, a serious shortcoming of the theory of cash flow management (which was also recognized in the BCG) is the assumption that the portfolio should be balanced in terms of cash at the end of the year or the sin of years. In fact, the amount of cash invested in the business portfolio as a whole need not be equal to the amount of money earned. Unprofitable funds can be invested outside the existing portfolio, for example, in the acquisition of new businesses, or these funds can be used to reduce debt, to pay dividends to shareholders. Conversely, if a business needs to invest more money than is possible to earn within the business portfolio (for example, when it is necessary to maintain the market position of an important and heavily consuming "star"), the missing amount must be borrowed from the bank and / or raise additional equity . The company's business portfolio should not be viewed as a closed system.

The second disadvantage of control theory in cash The BCG (which was not entirely clear until recently) is the unquestioned premise that all units must be managed from the center by controlling funds and strategies. The BCG cash management theory was very appealing to the chairmen of the board of directors and the chief executive directors who were interested in the role of the center. This theory has brought, perhaps, more good than harm, but only a small part of companies use this method of management in practice. Research by M. Gould and E. Campbell showed that all business units can be divided into only two categories: those that are managed based on financial control, and those that carry out strategic control or strategic planning. These are two very different approaches: the first implies more decentralization, the latter has more centralization, and it is really difficult to combine these two styles, as BCG does.

FEDERAL AGENCY FOR EDUCATION OF THE RUSSIAN FEDERATION

STATE EDUCATIONAL INSTITUTION OF HIGHER PROFESSIONAL EDUCATION

"TYUMEN STATE OIL AND GAS UNIVERSITY"

Institute of Management and Business

Department of SM

discipline: Strategic management

on the topic: "The matrix of I. Ansoff and D. Abel"

Completed: Art. 4 courses

Ostyakova O.O.

Checked by: assistant

Kovalzhina L.S.

Tyumen, 2010

Theoretical part

Ansoff matrix structure

Igor Ansoff is a Russian-born mathematician who emigrated to the United States at the age of 19. After earning a degree in applied mathematics, he found a way to use mathematical tools in business. In the early 1950s, he began working for the Rand Corporation in the strategic planning, later moved to Lockheed Corporation, where he later rose to the position of vice president of planning. The Ansoff matrix was developed by him during this period as an applied mathematical tool for strategic analysis. It was first published in the Harvard Business Review (Sep/Oct 1957) and was later described in the monograph Corporate Strategy (1965). Since then, the Ansoff matrix has remained one of the most famous and popular applied strategic planning tools.

On one axis in the matrix, the type of product is considered - old or new, on the other axis - the type of market, also old or new.

The Ansoff matrix is a field formed by two axes - the horizontal axis "company's products" (divided into existing and new ones) and the vertical axis "company's markets", which are also divided into existing and new ones. At the intersection of these two axes, four quadrants are formed:

Table 1.

Market penetration strategy (existing product - existing market). A natural strategy for most companies seeking to increase the share of existing products in their respective market. Expanding market penetration is the most obvious strategy, and its most common practical expression is the desire to increase sales. The main tools can be: improving the quality of goods, increasing the efficiency of business processes, attracting new customers through advertising. The sources of sales growth can also be: an increase in the frequency of using the product (for example, through loyalty programs), an increase in the amount of use of the product.

Possible sources of growth could be:

increase in market share;

increasing the frequency of using the product (including through loyalty programs);

increase in the amount of use of the product;

opening up new areas of product application for existing consumers.

Product expansion (Product development (new product - existing market)) is a strategy for developing new or improving existing products in order to increase sales. A company can implement such a strategy in an already known market by finding and filling market niches. Income in this case is provided by maintaining market share in the future. Such a strategy is most preferable in terms of risk minimization, since the company operates in a familiar market.

The offer in the existing market of new goods - strategy of development of the goods. Within the framework of this strategy, it is possible to introduce fundamentally new products to the market, improve old ones, and expand the product line (diversity). This strategy is typical for high-tech companies (electronics, automotive).

Opportunities for growth are based on:

adding new product features or product with higher quality, incl. product repositioning;

expansion of the product line (including through new options for offering existing products);

development of a new generation of products;

development of fundamentally new products.

Market development strategy (existing product - new market). This strategy is aimed at finding a new market or a new market segment for already mastered goods. Income is provided through the expansion of the sales market within the geographic region, and beyond it. Such a strategy is associated with significant costs and is more risky than both previous ones, but more profitable. However, it is difficult to enter new geographic markets directly, as they are occupied by other companies.

This strategy means adapting and bringing existing products to new markets. To successfully implement the strategy, it is necessary to confirm the presence of potential consumers of existing products in the new market. Options include geographic expansion, the use of new distribution channels, the search for new consumer groups that are not yet buyers of the product.

Companies whose marketing competencies are strong enough to be a key driver of development can successfully go this route by:

geographical expansion of the market;

use of new distribution channels;

search for new market segments that are not yet consumers of this product group.

The diversification strategy (new product - new market) involves the development of new types of products simultaneously with the development of new markets. At the same time, goods can be new for all companies operating in the target market or only for this business entity. Such a strategy provides profit, stability and sustainability of the company in the distant future, but it is the most risky and costly.

Launching a product of a fundamentally new type to a new market for the company. The most costly and risky strategy. Used when growth opportunities in existing markets are exhausted, when market conditions change, when a company leaves an existing market, profitable opportunities and high potential gains from capturing a new market.

The last of the possible strategies is the most risky for the company, because. implies entering a fundamentally new territory for it. Her choice is justified in cases where:

the company does not see opportunities to achieve its goals, remaining within the first three strategies;

a new direction of activity promises to be much more profitable than the development of existing ones;

when the available information is not enough to be sure of the stability of the existing business;

development of a new direction does not require serious investments.

Diversification can take one of the following forms.

Horizontal - the company remains within the existing external environment, its new direction of activity complements the existing lines of business, which allows using the synergy effect through the use of existing distribution channels, promotion and other marketing tools.

Vertical - the company's activities enter the previous or next stage of production or sale of the company's existing products. At the same time, the company can benefit from increased economic efficiency, but increases its own risks.

Concentric - the development of an existing product line by including products close to it, which have technological or marketing differences from existing ones, but are focused on new customers. This strategy provides economic benefits while reducing risk.

Conglomerate - a new direction of the company's activity is in no way connected with the existing ones.

The advantages of using planning according to the I. Ansoff matrix are visibility and ease of use.

The disadvantages of using planning according to the I. Ansoff matrix are a one-sided orientation to growth and restrictions in the context of two characteristics (product - market).

D. Abel matrix

Historically, there are several stages in the definition of a business. Initially, the business was defined based on the product produced: the production of cars, hairdressing services, transportation of goods across railway etc. Then T. Levitt introduced the concept of "marketing myopia" and argued that a business must be determined based on the needs of the market, and the main criterion for choosing a business is its consistency with market requirements. The example he cited regarding the definition of the business of American railroads became a classic. According to T. Levitt, the railways would be a prosperous industry if they used not a product definition of business - transportation by rail, but a market one. From a market position, railways should provide services for the transportation of goods and people, hairdressers should become beauty salons, etc. In later studies, I. Ansoff shows that focusing only on market requirements when choosing a new business (product) does not guarantee a synergistic effect . This effect occurs when there is a connection between the old business and the new one. I. Ansoff believes:

That a business should be defined on the basis of taking into account two factors “product-market” (Ansoff matrix);

The main criterion for determining and selecting a new business should be a synergistic effect.

The D. Abel matrix, in fact, corrected the shortcomings of the model proposed by I. Ansoff. Abel proposed to define the field of business in three dimensions:

customer groups served (who?);

customer needs (what?);

the technology used in the development and production of the product (how?).

Figure 1. The field of possible strategies (according to D. Abel).

The first major criterion for assessing the Abel matrix is the compliance of the considered industry with the general direction of the company, in order to use synergies in technology and marketing. Other selection criteria are the attractiveness of the industry and the "strength" of the business (competitiveness).

D. Abel developed I. Ansoff's approach by proposing an additional third factor for determining business - technology. First, the position of the original business is established on the diagram. Then, moving from the starting position along the three axes, the enterprise can find other market segments, a different use of products to meet identified consumer needs, or identify opportunities to reduce production costs by changing production technology and marketing products.

R. Cooper (Cooper) considers the use of a three-dimensional approach on the example of a company that manufactures equipment for the manufacture of mixtures in the pulp and paper industry. The existence of new areas of activity for a given company can be viewed along three axes. New consumer groups: chemical industry, oil refining, food industry. These industries can also use the company's equipment for the manufacture of mixtures. Expanding needs characteristics suggests that buyers may require additional transactions. The combination of new consumer groups with additional customer requirements provides a set of possible business directions. For example, a company may develop a grinding function for the food and chemical industries, a special pumping function for refining oil in the chemical industry, and so on. Each of these capabilities represents a new area for the company. At the same time, the company can also move in the third direction, improving the technologies for performing the considered operations. It can use the principles of magnetohydrodynamics to move fluids, apply bio-oxidation processes and other technologies.

In Russian practice, one can also find relevant examples. The Omsk plant of washing machines produced the washing machine "Siberia" with a centrifuge. Then, based on the existing technology for the production of centrifuges, the production of separators for small rural dairies was organized. Consequently, a new application of the existing technology was found.

Thus, the set of possible strategic directions for business development is significantly expanding. This raises the problem of determining the criteria for choosing the best area. The first and most important criterion is the alignment of the area under consideration with the overall direction of the company in order to use synergies in technology and marketing. Other selection criteria are the attractiveness of the area and the strength of the business. The attractiveness of the region, in turn, is evaluated by two factors: market attractiveness and technological complexity. The strength of the business is determined by the market advantages of the product and the company's synergies in technology and marketing.

Abstract >> Management and matrix D. abel, ; model...or high). Matrix AND. Ansoff and matrix D. abel Product/Market Development Model I. Ansoff (matrix Ansoff) allows you to use...

matrices in strategic management are perhaps the most effective tool in terms of the speed of assessing the situation for management decisions. With the help of matrices, you can draw fairly quick conclusions about actions with a particular product, business line or vector of enterprise development. But there is a catch in speed, because when developing a strategy, one cannot rush.

Harry Igor Ansoff(1918-2002) American of Russian origin. Considered the founder of the discipline of Strategic Management.

The Ansoff matrix considers the interaction of two elements: the product and the market, allowing you to understand which strategy to follow.
This tool was first published in the Harvard Business Review in 1957.

To the essence of the Ansoff matrix

Based on your choice - “which product, existing or new and in which market, existing or new”, a growth strategy is proposed (how and due to what your business can grow), you just need to meet a few conditions.

There are four growth strategies:

1. Penetration strategy

Demand for your goods or services is far from saturation point and your share can be increased at the expense of existing customers. You can “tear off” a share from competitors (consumers are not “tied to a particular company”). You can scale and invest.

2. Market development strategy
This strategy is followed if:
Your company is doing well, you know how and to whom to sell, there is a unique product and / or service, but so far only in your region of presence. The possibility of entering new markets is being considered - to other cities or even countries (by ourselves or through distributors). Subject to low barriers (obstacles) to entry into these markets, their growth rate is high. Well, there is capital to ensure expansion.

3. Product development strategy
This strategy will work if
Existing goods and/or services are on the wane, no growth spurts, much less breakthrough sales, moreover, a slow decline in the level of income from them. There is a need to expand the range in depth or in breadth.

4. Diversification strategy
This strategy will work under the following conditions:
- that new activities are more profitable than the development of existing ones.
- if you do not need large investments for expansion.

In any case, and in practice it happens, any expansion, whether in breadth or depth, is very risky if it is not calculated and planned properly.

Pros and cons of the Ansoff matrix

The main advantage of the tool is that it works. For a general idea of where efforts should be made so that the business has growth, the Ansoff matrix is effective.

The disadvantages include the fact that the Matrix, in its original form, takes into account only options for business growth and does not take into account development in any way. As we wrote in the article "" growth without development is dangerous. Again, well, the businessman found out which strategy to follow, or, as most often happens, he already used it, he just didn’t know what it was called ... So what? What's next then?

Entrepreneurs, especially among small businesses, have no time to understand the terminology and abstruse reasoning. By by and large, this descriptive tool is made for top management of medium and large corporations, as well as for business consultants. That is, for those who have a special education and understand the theory. However, as it was written at the beginning of the article, thanks to the Ansoff matrix, you can quickly navigate the situation. And in the descriptions, find some clues, or confirmation of your actions, for further movement.

Literature:

Philip Kotler, Roland Berger, Niels Bickhoff “Strategic management according to Kotler. The best tricks and methods.

Ansoff, H.I. "Strategies for Diversification"; Harvard Business Review, September-October 1957

Strategic planning of a company is one of the steps of successful business development. This truth began to form from the beginning of the 20th century. And the idea has evolved rapidly over the course of 100 years. The first divisions engaged in long-term and were not permanent departments or divisions in this kind of activity. Annual financial estimates - this ended the strategic construction.

Idea Founder

Igor Ansoff - a native of Russia, who lived most of his life in the United States, gives one of the simplest and most understandable definitions of strategic planning. According to this specialist, the analytical, logical process, which assumes the future position of the enterprise in the market with its forecasts, must take into account the external environment. The Ansoff matrix is the most famous tool of the American mathematician-economist. Elementary in the understanding of the square of the forecast of the development of the organization, its simplicity has won a strong place in almost every modern enterprise.

History of strategies

Only at the second stage of the development of planning, and this happened in the 50-60s of the 20th century, did enterprises begin to form planning departments that were constantly engaged in the prospect of business development.

On the basis of two stages of work, a bank is being designed. It implies the formation of a set of services provided, which determines the successful operation in this market segment, ensures economic efficiency, and sets the vector of development.

The last stage of work is the assortment strategy. For its formation, it is necessary to consider the following development paths:

Service differentiation. It implies the allocation of a separate niche for the sale of existing products that are different from competitors' products.
Narrow specialization. As a development strategy, it is chosen to provide products to a number of customers limited by certain characteristics of activities.
Service diversification. Expansion of the range and number of market sectors for the sale of goods, as a rule, is the prerogative of universal banks.
Vertical integration. Strategy is the embodiment of synergy.

Percentage

The Ansoff matrix and many years of experience in its use in practice made it possible to derive certain patterns of success in applying a particular strategy, as well as the probable value of costs. A visual presentation of the percentage of risks to costs makes it possible to make marketing decisions with a clear understanding of the likelihood of losses.

The strategy of introducing new products in the existing market loses significantly in terms of success and the number of costs when choosing the option "old product in the developed segment". Such indicators allow us to say with confidence that for each enterprise the development alternative is limited by a number of circumstances, the external environment, economic opportunities and many other factors. The Ansoff matrix is only a tool to help in choosing a strategy, which does not negate deeper analyzes of the enterprise's capabilities.