Corporate Level Strategy
Ansoff’s Growth Vector Matrix Growth Avenues for Businesses
Ansoff’s Growth Vector Matrix • Market penetration / Consolidation: – Organisation takes increased share of its existing markets with its existing product range – Greater market share - increased power vis-à-vis buyers and suppliers, greater economies of scale and experience curve benefits – L N Mittal moved rapidly to become the largest steel producer in the world by acquiring struggling steel companies around the world – Gaz de France and Suez, two utility companies with dominant positions in France and Belgium, decided to merge
Ansoff’s Growth Vector Matrix • Product development: – Organisations deliver modified or new products (or services) to existing markets – It implies greater degrees of innovation – Sony’s move from Walkman portable music system from audio tapes, through CDs to MP3- based systems – Banking and Insurance companies developing products to cater to the existing customer
Ansoff’s Growth Vector Matrix • Market development: – Involves offering existing products to new markets – New Segment: Traditional colleges might offer its educational services to working professionals / skill development of entrepreneurs – New users: Aluminum whose original users in packaging and cutlery manufacture are now supplemented by users in aerospace and automobiles – New geographies: Financial Inclusion scheme through Pradhan Mantri Jan Dhan Yojana
Ansoff’s Growth Vector Matrix • Diversification: – Strategy that takes an organisation away from both its existing markets and its existing products – The primary approach to corporate level strategy – Diversified firms vary according to • Level of diversification • Degree of relatedness
Corporate-level strategy : Specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets
Corporate-Level Strategy: Key Questions • Corporate-level Strategy’s Value – The degree to which the businesses in the portfolio are worth more under the management of the company than they would be under other ownership – What businesses should the firm be in?
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- Fall '16
- Rajesh Pillania
- global business units, Agri Business, Household Care GBU