ansoff s matrix
DESCRIPTION
ansoff's matrixTRANSCRIPT
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ANSOFF MATRIX, BCG MATRIX,
LIFE CYCLE ANALYSISCUEVAS, Rieland
REBADOMIA, ChumesceneTAN, Nerick Jason
TAVEROS, Maxine AnnVENTURA, Cleo ArianaVILLAHERMOSA, Giah
UY, John
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ANSOFF’S MATRIXProduct and Growth Matrix
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Ansoff’s Matrix• Developed by Igor Ansoff
• Explains different growth strategies for a company via existing products and new products, and in existing markets and new markets
• Used after having the SWOT Analysis
• Suggests for possible strategies: Market Penetration, Market Development, Product Development and Diversification
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Different Growth Strategies
Market Penetration
Product Development
Market Development Diversification
Existing Products New Products
Esta
blis
hed
Mar
ket
New
Mar
ket
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Market Penetration
Aims•Focus on selling your existing products or services to
existing markets to achieve growth in market share
Risk Low
Profits Low
Approaches
•Maintain or increase the market share of current products
• Secure dominance of growth markets•Restructure a mature market by driving out
competitors•Increase usage by existing customers
Requires•Detailed market•Competitor intelligence
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Market Development
Aims•Focus on selling your existing products or services to
new markets
Risk Moderate
Profits Medium
Approaches•New Geographical Markets•New product dimensions or packaging•New distribution channels
Requires•Detailed market and competitor intelligence•Well-researched market, financial and operational data
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Product Development
Aims•Focus on developing new products or services to
existing markets
Risk Moderate
Profits Moderate
Approaches•New product is closely associated with current product•Matches current customers’ purchasing habits•Reinvents or refreshing existing products
Requires•Research and Development•Assessment of customer needs•Clear path for brand extension
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Diversification
Aims•Focus on selling new products or services to new
markets
Risk High
Profits High
Approaches
•Honest assessment of risks•Access to capital and willingness to invest•Clear expectation of potential gains•Right balance of risks versus rewards
Types•Forward•Full •Backward
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Advantages and Disadvantages
- Useful tool in analyzing the strategic position of the firm and set objectives for the way forward
- sub-divides the options into four specific strategies that management could consider for long term growth
- indicates the level of risk associated with each strategy thus encouraging management to focus carefully on the impact of any decision made
- Simplistic
- Its main focus tends to be market potential rather then the resources required by the firm to support its chosen strategy
- usefulness will be very limited to a firm whose objective is survival
- No guarantee of success
- Based on forecasts
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BCG Matrix
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INTRODUCTION
• BOSTON COUNSULTING GROUP(BCG) MATRIX is developed by Bruce Henderson of the Boston Consulting group in the early 1970s
• Businesses are classified as low or high performers depending on their relative market share and their market growth rate
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MARKET SHARE
• It is the percentage of the total market that’s being serviced by your company, measured either in revenue terms or unit volume terms.
• RMS= Business unit sales this year
Leading rival sales this year
The higher your market share, the higher proportion of the market you control
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MARKET GROWTH RATE
• Used as a measure of a market’s attractiveness
• MGR= Individual sales this year- Individual sales last year
Individual Sales Last year
Those with high growth rate are those where the total market share available is expanding, and there is plenty of opportunity for everyone to
make money
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BCG MATRIX
• A portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories:
>Stars
>Question marks
>Cash cows
>Dogs
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STARS
• High growth, high market share• Needs large amounts of cash and are
leaders in the business so they could also generate large amounts of cash.
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CASH COWS
• Low growth, High market share• Foundation of the company, usually the
stars of yesterday• Generate more cash than required• Extract profits by investing as little cash as
possible• Located in an industry that is mature
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Dogs
• Low growth, Low market share• Avoid or minimize the number of dogs in a
company• Do not have potential to bring much cash• Business is situated at a declining stage
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Question Marks
• High growth, Low market share• Most businesses start of as this• Absorb great amounts of cash if market
share remains low• Have potential to become stars, cash
cows, or dogs• Investments should be high
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WHY BCG MATRIX?
• To assess:• Profiles of products/businesses• The cash demands of products• The development cycles of products• Resource allocation and divestment
decisions
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BENEFITS
• Simple and easy to understand• Used to identify corporate cash resources
that can be used to maximize a company’s future growth and profitability
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Limitations
• Uses only two dimensions• Problems on getting data on market share
and market growth• High market share doesn’t mean high
profits all the time• Businesses/products with low market
share can be profitable too
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CONCLUSION
• Though the BCG matrix has its limitations, it is one of the most famous and simple portfolio-planning matrix, used by large companies having multi-products.
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Life Cycle Analysis
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What is LCA? Looking at a products complete life
cycle From Raw Materials to Final Disposal of
the product. Examines the environmental impact of a
product by considering the major stages of a products life.
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What is LCA? (Contd) Major Stages include:
A. Raw Material AcquisitionB. ProcessingC. ManufacturingD. Product LifeE. Waste Management/ End of Life
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Historical Perspective 1960’s: Coca Cola explores alternative
containers besides the glass bottle.
1970’s: Oil embargos in the US create concerns about energy supplies. Resources & Environmental Profile Analysis (REPA)
1974: A new beverage container comparison and compare different plastics.
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Historical Perspective (Contd)
1980’s: “Green Movement” in Europe brings focus on emissions and need to recycle.
1990’s: Battle between cloth and disposable diapers
1992: Energy, Water, and Solid waste
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Purpose1. Calculate products environmental
impact.2. Identify positive and negative
environmental impact.3. Opportunities for process or product
improvement.4. Compare several processes.5. Quantitatively justify a change in a
process or product.
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Goal Definition
and Scoping
Life Cycle Inventory
(LCI)
Life Cycle Impact
Assessment (LCIA)
Final Report
LIFE CYCLE ANALYSIS
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Life Cycle Inventory (LCI) process which quantifies all inputs and
outputs of a process or product.
Inputs = Energy and Raw Materials
Outputs = Material Emissions to the Environment, such as water, air, & solid waste.
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Sample Life Cycle Stages
InputsLife Cycle of Process or Product
Output
• Trees and Crops
• Water• Gas &
Crude Oil• Chemicals• Energy• Capital
Equipment
• Raw Material Processing
• Manufacturing• Production• Transportation• Product Life• Maintenance
• Airborne Emissions
• Recyclable Waste
• Co-products• Waterborne
Emissions• Landfill Waste• Dumping and
Littering
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Life Cycle Impact Assessment (LCIA)
Way to interpret how the processes and products impact human health and environment.
Gives a more meaningful basis for comparison.
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Step 1: Create a definition and scope Consider the following topics when
developing definition and scope:a. Goal of LCAb. Audiencec. Production and Process
Informationd. Data Accuracye. Result Interpretation and Displayf. Ground Rules
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Step 2: Life Cycle Inventory (LCI) Consider the following when completing
the LCI:
a. Process Flowb. Data Gathering c. Data Inventoryd. Result
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Step 3: Life Cycle Impact Assessment (LCIA) Consider the following when completing
an LCIA:a. Impact Categoriesb. Result Categorizationc. Impact Comparisonsd. Important Potential Impactse. Results
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Step 4: Interpret the results and make recommendations Consider the following when interpreting
results:a. Final Resultsb. Conclusionsc. Limitationsd. Recommendationse. Report Information