Ansoff Matrix and its Application

Discuss About The Market Space And Make Competition Irrelevant.

As show in the diagram below, the matrix gives the Dow AgroSciences industry manager four options to choose from in terms of product and market activities (BLOGS & ADVICE, 2014). The four scenarios are researched properly and would always give a positive outcome to the manager if used wisely. The four possible scenarios for the company are discussed below

	Existing Products	New Products
Existing Markets Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Market Penetration	Product Development
New Markets	Market Development	Diversification

Figure 1: Ansoff Matrix

In Dow AgroSciences industry market penetration has been playing a big role. In this area the industry has been increasing the sales of the existing volume in the existing market. Some of the questions which help the company to defend its market and products are, how can we defend our market share? By answering this question the Dow AgroSciences industry have been able to perform very well. Some of the ways it has been able to do this is by producing the quality chemicals to fight diseases and pests among farmers. Customers have confidence in agrochemical industry that they will be able to make quality products that will fight all the disease. Another question is, how can we grow our market? The industry has been able to grow its market by promising their customers quality and timely products (Bachmeier, 2013). 

Dow AgroSciences industry has been carrying researches to capture their existing markets with new products. In the recent years there are certain bacteria which have developed antibiotic and they are resistant to biotic which are manufactured by agrochemical industry. To make that their current customers have been stolen by their competitors the company is carrying out research day and night to make sure they are the pest and diseases are controlled thus controlling its current market through research and extension (Bachmeier, 2013).

In Dow AgroSciences industry, this strategy involves reaching new market with the current market. The company has realized its products are very strong and efficient in controlling diseases and pests. To make sure the products and services have reached as many customers as possible the company has launched the campaign in existence market. This will enable Agrochemical industry to reach new customers in the current market. Customers primary role is to make sure their needs and want are satisfied which agrochemical industry does (Proctor, 2014). 

The company realizes that at some time relying on new or old products in the same market can be risky. To reduce the risk, the company has tried its best to reach new products on the new market in order to diversify the risks. The products can be the same or different products. The aim of diversification in Agrochemical industry is to reduce the risk involved in the long run (Proctor, 2014).

Blue Ocean Strategy for Market Space Creation

Blue Ocean strategy can be defined as a marketing theory which was published by W. Chan Kim and Renee Maurborne in the year 2005. The theory suggest that companies can succeed by creating “blue Ocean” of uncontested market space contrary to “Red Ocean” where competitors fight to dominate each other.  The analogy is that an ocean filled with vigorous competition would turn bloody later (Kim & Mauborgne, 2014). Education industry has been trying to create a new and uncontested market place with competitors by making them irrelevant by decreasing the cost used in creating the products. The guidelines which have been used by education industry include

The industry has been identifying the key features which define the products and services they are offering. For instance some of the key features in education include human volition, politics and variability of educational programs. The above features are the most important education key which the industry identifies and pays attention to (Kim & Mauborgne, 2014).

The second guideline is that the education industry looks for group of customers which include parents, students, lecturers, professors and teachers. The industry understands that the above stakeholders have similar needs and must be satisfied in the long run. The industry makes sure it fulfills each stakeholders need in full.

At this point the education sectors or industry creates value thus reducing the cost. The industry realizes that in order to make enough profit it must reduces it cost as well as creating the customers value in the long run. The fact the area has less competition acts as the competition advantages to the industry in general.

The industry sometimes considers making new products or services in the new place. Simply the industry ventures in new market and tries to acquire new customers in the long run. The primary purpose of introducing new product or venturing in a new market is to increase the number of sales thus increasing profit. The industry realizes and understands that, the primary role of each company is to increase the number of sales as well as profit which is directly proposition top sales (Kim & Mauborgne, 2015).

The company is tourist attraction hotel which is located at Pakistan, Toronto and Dubai. In order to explain the Porter’s generic strategy am going to use this tourism company.

The strategy also known as ways of competing is used by Avari Hotel Company to compete competitively with other companies. The strategy is used to determine whether the firm’s profitability is below or above the industry average. The three strategies are cost leadership, focus and differentiation (Cambridge, 2015). In the Avari Hotel Company the strategy has two variants which are differentiation focus and cost focus. The above is summarized in the table below.

Competitive advantages
Competitive scope		Low Cost	Differentiated
Broad Target	1.                  Cost leadership	2.                  Differentiation
Narrow Target	3a. Cost Focus	3b. Differentiation Focus

Porter’s Generic Strategy in Tourism Industry

Figure 2: Porters Generic Strategy

In terms of cost leadership, Avari Hotel Company tries to be the lowest cost producer in the industry. In this company the source of cost advantage are varied which depends mostly on the structure of the company. Some of the industry structures which create room for cost leadership include accessible to raw materials, economies to scale, skilled human labor, and high technology among other factors. The Avari Hotel Company understands that a low cost producer must find as well as exploit all sources which might be regarded as cost advantage. Avari Hotel Company has managed to sustain the overall cost leadership because its performance is above average in the industry this is contributed to the fact that the company is able to command the price well (Hill, et al., 2017).

Compared to other firms in the industry, the Avari Hotel Company has been able to provide unique services which are highly valued by customers. The company is able to provide unique cars which provide unique services to the tourist who uses their services (Scheele, 2014).  In return the company receives a lot of tourist who uses the unique cars and the company benefits by increased revenue paid by tourists.

This strategy focuses on narrow competitive scope within the Avari Hotel Company. The focus always selects a group of segments in the Avari Hotel Company and tailors its strategy to serving them.

The Avari Hotel Company focus strategy has two variants

The first one is cost focus which utilizes cost advantages on target segment

The second one is differentiation focus. Differentiation focus utilizes differentiation on its target segments, although, even if they are not the same, they both rest of differences between a focus target segment and other segments in the Avari Hotel Company.

Generally, the cost focus exploits the customers by identifying their differences in cost behavior while the differentiation focuses mainly on exploiting the customers through the special needs from the buyers in the targeted customers (Scheele, 2014).

References

Bachmeier, K., 2013. Analysis of marketing strategies used by PepsiCo based on Ansoff’s theory. 3nd ed. Publisher: Mu?nchen GRIN Verlag GmbH.

BLOGS & ADVICE, 2014. Proffesional academy. [Online]
Available at: https://www.professionalacademy.com/blogs-and-advice/marketing-theories—explaining-the-ansoff-matrix-[Accessed 18 April 2018].

Cambridge, U. o., 2015. Management Technology Policy. [Online]
Available at: https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-strategies/[Accessed 18 april 2018].

Hill, C. W. L., Schilling & Jones, G. R., 2017. Strategic management : an integrated approach : Theory & Cases. 2nd ed. Boston, MA: Cengage Learning.

Kim, W. C. & Mauborgne, R., 2014. Blue Ocean Strategy, Expanded Edition : How to Create Uncontested Market Space and Make the Competition Irrelevant.. 2nd ed. Boston: Harvard Business Review Press.

Kim, W. C. & Mauborgne, R., 2015. Blue ocean strategy : how to create uncontested market space and make the competition irrelevant. 1st ed. Boston, Massachuetts: Harvard Bus Review Press.

Proctor, T., 2014. Strategic Marketing : an Introduction.. 5th ed. Hoboken: Taylor and Francis.

Scheele, D., 2014. The trade-off between cost leadership and differentiation. 4th ed. Munich : GRIN Verlag GmbH.