(ii) Explain how the existing product range and the actions per Note (3) would feature in

Question

(ii) Explain how the existing product range and the actions per Note (3) would feature in Ansoff’s

product-market matrix. (7 marks)

Answer 1

正确答案：
(ii) Market Penetration
With regard to existing products it would appear that a strategy of market penetration is being followed, whereby attempts
are made to sell existing products into existing markets. This is a low risk strategy which is most unlikely to lead to high
rates of growth, reflected in the forecast increase of 2% per annum in the years ending 30 November 2008 and 2009.
Management seeks here to increase its market share with the current product range. In pursuing a penetration strategy
the management of Vision plc may to some extent be able to exploit opportunities including the following:
– Encouraging existing customers to buy more of their brand
– Encouraging customers who are buying a competitor’s brand to switch to their brand
– Encouraging non-users within the segment to buy their brand
‘Strengths’ within the current portfolio will need to be consolidated and any areas of weakness addressed with remedial
action.
Market Development
The purchase of the retail outlets will enable management to sell existing products via new channels of distribution. The
products of both the Astronomy and Outdoor Pursuits divisions could be sold via the retail outlets. Very often new
markets can be established in geographical terms. Management could, for example, look to promote the sale of
microscopes and associated equipment to overseas hospitals.
Product Development
The launch of the Birdcam-V is an example of a product development strategy whereby new products are targeted at
existing markets. Very often, existing products can be improved, or if an organisation possesses adequate resources,
completely new products can be developed to meet existing market needs. Some of the main risks here lie in the ‘time
to market’ and product development costs which frequently go well beyond initial estimates.
Diversification
The purchase of Racquets Ltd is an example of diversification on the part of Vision plc since the products and markets
of Racquets Ltd bear no relationship to the existing products and markets of the company. In this regard the
diversification is said to be unrelated.
The establishment of the Oceanic division could be regarded as a related diversification since existing technology will be
used to develop new products for new markets. The success of this strategy will very much depend on the strength of
the Vision brand.