Diversification When firms launch new products in new markets, diversification happens which entails both new products to be developed and new markets to be tapped. Excellent portfolio management by Unilever will see T2 become the future Dove or Tipton, before naturally becoming a Marmite and Unilever s ansoff matrix another Slim-Fast, but smart investments will prolong the growth stages and hold off the decline.
However, market penetration has its limitations and these manifest when the market is saturated and hence, growth diminishes for the products. Indeed, diversification is a high-risk strategy and is only justified when there are chances of high returns for the firms.
Ansoff Matrix Introduction The famous management expert, Igor Ansoff provided a roadmap for firms to grow depending on whether they are launching new products or entering new markets or a combination of these options.
Conclusion As can be seen from the preceding discussion, it is imperative for firms to grow as otherwise their resources would not generate the returns needed for the firms to make profits as well as deliver value to their shareholders.
For this very reason, Unilever sold its Slim-Fast brand in July to private-equity firm, Kainos Capital, to focus on other brands with greater appeal and growth potential.
For example, Unilever claimed in that the soups market declined in developed markets. As can be seen from the figure accompanying this section, the combinations of the two axes provide the firms with options that they can pursue in search of market share. Moreover, firms need to continually look for ways and means to increase their market share, which would help them create Unilever s ansoff matrix for their stakeholders.
Simply keeping them on the market is wasting resources generated by Star and Cash Cow brands. However, there are still a couple of cautions to be considered when using it.
Firstly, market growth may be directly influenced by Unilever due to its market power. Market development is more risky than market penetration as the firm is entering uncharted waters and therefore, it is in the interests of the firms to do their due diligence before entering new markets.
These are the dead-end products whose time has been and gone and likely most offer no future profits. Examples of market development would be the mobile telephony companies like Vodafone and Nokia entering African markets where these markets are yet to be tapped and where these firms can leverage their existing expertise to enter these markets.
This long term perspective is a key strength of the BCG Matrix as a strategic tool. Investment in Marmite in recent years has been largely limited to advertising campaigns.
Product Development When firms seek to launch new products in existing markets, product development happens. This is a minimal risk strategy as all that a firm has to do is to increase its marketing efforts and improve on its market share. In other words, the firm has to ensure that it leverages the current capabilities, resources, and gears towards a growth-oriented strategy.
Examples of diversification would include companies like Reliance venturing into mobile telephony and retail segments where they not only have to move away from their core competencies but also have to launch new products targeted at the new customer segment.
This roadmap has been presented in the form of a Matrix that has four quadrants with the axes of products and markets being the determinants of the strategies. The four quadrants which are described in detail subsequently pertain to increasing market share through market penetration, venturing into new markets with the existing products or market development, and launching new products in existing markets with product development, and finally, diversification when firms seek to enter new markets with new products.
This is the most risky of the four quadrant strategies in the Ansoff Matrix as essentially the firms are not only testing the waters in uncharted territory but they are also launching new products that may or may not be well received by the customers.
This strategy can be successful when the firms have already established themselves in the existing markets and all that they need to do is to launch new products, which leverage the brand image and the brand value and meet the expectations of the customers in the existing markets. Marmite is a key Cash Cow for Unilever with sales just about holding their own in the spreads industry that is slowly beginning to decline in Europe and North America.
For instance, the TATA group in India is perceived as delivering good value and this helped them to garner market share when they diversified into new markets and new products.
Examples of market penetration would include the Television Channels and Media Houses trying to maintain their existing features in the existing markets and ensuring that they grow because of the growth in the size of the market or because they have provided a value proposition that is better than their competitors are.
Further, they also recommend firms with existing customer loyalty and customer base as the cross migration from one segment to the other happens only when the customers are assured of receiving value for their money.
Management experts recommend diversification only when the firms are sitting on enough cash and other resources, as the firms need to have deep pockets to stay the course until the time profits are realized.
Often relatively young brands, they are yet to maximise their potential within the industry and therefore require greatest investment from the success of Cash Cow brands in order to exploit the fast market growth ahead of competitors.
In conclusion, the Ansoff Matrix is very relevant in these recessionary times as it can be applied by any firm wishing to either expand into newer markets or leverage its existing capabilities. The premise of the BCG Matrix is that all products or brands can be classified as one of the following categories, based on its market share and market growth: Despite the limitations, the BCG Matrix is a very simple and useful tool for portfolio managers to review their brands and products across industries and SBUs, and assist in prioritisation of investment and divestment.
This is arguably the most important category of brands for companies like Unilever as they require very little further investment to generate revenue — allowing for profits to be reinvested into Stars or Problem Child brands. Despite its existing stature, continued investment in the patented TESS technology which uses the natural essence pressed from freshly picked leaves enabled a global re-launch of Lipton Yellow Label that fuelled growth of 5.Home» STRATEGIC MARKETING» Ansoff Matrix – The growth share Matrix of Ansoff Ansoff Matrix – The growth share Matrix of Ansoff March 12, By Hitesh Bhasin Tagged With: Marketing strategy articles.
SWOT & BCG matrix of Unilever 1. Portfolio Analysis 2. HISTORY • Lever brothers is established byWilliam H.
Lever in • Key player in food & household product industry • Historically grew through acquisitions 3. INTRODUCTION • Lever Brothers, the old name of Unilever changed into Unilever after the merger of Lever Brothers. A Strategic Analysis of UNILEVER Unilever Sustainable Living Plan- STRATEGY Industrial Life Cycle PORTER'S 5 FORCES Threat of new Entrants- HIGH BCG MATRIX TOWS STRATEGIC OPTIONS STRATEGIC OPTIONS EXTERNAL ANALYSIS OF FMCG- Economical Factors EXTERNAL ANALYSIS OF FMCG- Social Factors.
Essays - largest database of quality sample essays and research papers on Ansoff S Matrix Unilever. The Ansoff matrix helps in determining growth that can be implemented through marketing strategies.
As shown in Appendix 3, Unilever’s strategic objective falls under Product development which indicates intense growth. The famous management expert, Igor Ansoff provided a roadmap for firms to grow depending on whether they are launching new products or entering new markets or a combination of these options.
This roadmap has been presented in the form of a Matrix that has four quadrants with the axes of products and.Download