Ansoff’s Matrix
New
Products
Current
Products
Current
Markets
New
Markets
1
Product/Market Expansion Grid
Existing
Products
Markets
New
Markets
New
Products
Product Development
Market penetration is a strategy of
Product development is a strategy
increasing your share of existing markets.
This might be achieved by raising
customers’ awareness of products and
services or finding new customers.
for enhancing benefits you deliver to
customers by improving existing products
and services or developing new ones.
Market Development
Diversification
Market development is a strategy of
Diversification is a strategy that
finding and entering new markets with
current product or service range. The new
market could be a new region, a new
country or a new segment of the market.
usually carries high costs and high risks. It
often requires organisations to adopt new
ways of doing business and so has
consequences far beyond simply offering
new products/services in a new market. It
is therefore usually a strategy to be
adopted when other options are not
feasible.
Adapted from Ansoff I. (1968)
2
Boston Box
+
Relative Market Growth Rate
Existing
Markets
Products
Market Penetration
+
Relative Market Share
3
1
Cost|Focus|Differentiation
Differentiation
Low Cost
Focus
4
Blue Ocean
• Create uncontested market space
• Make the competition irrelevant
• Create and capture new demand
• Break the value-cost trade-off
• Align the organisation to
differentiation and low cost
Red Ocean
• Compete in existing markets
• Beat the competition
• Exploit existing demand
• Make the value-cost trade-off
• Align the organisation to
differentiation or low cost
Kim, Chan W., and Mauborgne, Renee (2005) Blue Ocean Strategy: How to Create Uncontested
Market Space and Make the Competition Irrelevant Boston, Harvard Business School Press.
5
The Four Actions Framework
Reduce
d
Re
e
uc
Eliminate
Which of the factors the
industry takes for
granted should be
eliminated?
C
t
os
Which factors should be
reduced well below the
industry standard?
Create
A New
Value
Curve
Which factors should be
created that the industry
has never offered?
Raise
Which factors should be
raised well above the
industry standard?
R
e
ais
De
an
m
d
Particularly eliminate and create to make the existing
rules of competition irrelevant and move beyond
competition onto new space…
6
2
Six principles
• Formulation
• Reconstruct market boundaries
• Focus on the big picture, not the
numbers
• Reach beyond existing demand
• Get the strategic sequence right
• Execution
• Overcome key organisational
hurdles
• Build execution into strategy
Kim, Chan W., and Mauborgne, Renee (2005) Blue Ocean Strategy: How to Create Uncontested
Market Space and Make the Competition Irrelevant Boston, Harvard Business School Press.
7
Strategy Canvas and Value Curve
High
Blue Ocean
Red Ocean
Low
Price
Marketing
Prestige
Quality
Factors
New
Factors
New
Factors
8
3