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Report on Ansoff Matrix Strategic Management Technique

   

Added on  2020-06-04

11 Pages3436 Words93 Views
Business Strategy

Table of ContentsINTRODUCTION...........................................................................................................................1TASK ...........................................................................................................................................1CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8

INTRODUCTIONEvery organisation has some long or short term objectives. They keep their main focus onoptimum utilisation of available resources so they can achieve their set targets effectively.Beverage industry is a growing sector and coca cola is one of the leading enterprise of this field.Their are operating their business across the globe by selling more than 15 products. This reportwill discuss about ansoff matrix which is can be considered as one of the most importantstrategic management technique. It will also include its strength and weaknesses.TASK An organisation can adopt strategic management various techniques like BCG matrix,PESTLE and SWOT analysis, Balance scorecard, Porter's five forces model etc. in order to attaintheir set objectives. Ansoff's matrix is another tool which is used by most of the multinationalcompanies. Following are some advantages of ansoff's matrix:Managers of various companies adopt it because it assist in determining expected risks soan enterprise can move in right direction. In this era, market changes swiftly because ofdifferent factors like technology, government regulations etc. Every organisation want topredict future uncertainties so they can make effective plans accordingly (Ang, 2011). Ifthey get little idea about forthcoming time than they can exploit maximum benefit fromthat particular situation. This technique focuses on growth strategies so a firm can reach their set targets.Development of business is main objective of every company. If they use this matrix thanthey can make effective plans for expansion of organisation. Without aim an enterprise can not reach anywhere. This tool assist in setting achievabletarget so employees can increase their efficient accordingly. If company do not have anygoals than they can not make effective strategies. It also help in formation of alternative plans so they can change their action plan it thingsgo south. This technique will support them in saving time and money because in case ofemergency they do not have waste their time in taking crucial decision. Every technique has some shortcomings, following are some weaknesses of ansoff's matrix:1

This tool do not focus on day to day business operation which is crucial for success of anenterprise. A company can make effective plans but if they fail to execute them than allof their effort will become useless. Manager always give more importance to processinstead of result. This tool focus on goals instead of ''how to achieve that goal''. Thislacuna reduce significance of ansoff's matrix. The main reason that some organisations do not like to use this technique is itstheoretical model (Ang, 2011). Their is a big question mark on its practical approach.Manager at ground level believe that plans made in this matrix do not consider groundreality which is very different from books. This tool do not include external competitors who have capacity to change importantdecisions taken by an organisation. Sometime other player of an industry make samestrategies which result into huge loss for both enterprises. In order to earn more profit,company has to get vital information about opponent firms. It is an optimistic approach, it do not include unfavourable factors which can becomemain reason in failure of a plan. It only talks about good things and exclude badoutcomes with can derail an organisation. Accurately in prediction is difficult, this point reduce the importance of ansoff matrixbecause this whole approach is based on anticipation. It include unforeseen events whichmay or may not happen in future. Beverage industry has seen remarkable growth in last three decades because companiesare launching various types of new products. People are getting more choices, this can beconsider as the main reason for success of this sector (Buckley and Ghauri, 2015). Some newplayers are also entering in market and they are changing the way of doing business. Coca-cola isnumber one company of of beverage industry. It was incorporated in USA and currently its brandvalue is more than 34,180 million dollars. Ansoff's matrix focus on four elements, first is marketpenetration, second is market development, third is product development and last isdiversification. In market penetration, company make growth strategy for selling an existing commodityin existing market. This task can be done by doing sales promotion, advertising, sometime2

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