Developing competitive marketing strategies
An Amway case study

Page 1: Introduction

All organisations face an external business environment that constantly changes. Sometimes these changes are slight eg minor amendments to regulations or a new firm entering the market as a 'small player'. At other times, however, changes in the environment may have important consequences for an organisation eg new technologies, changing consumer tastes or a merger between two large...
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Page 2: Strategic analysis

The process of strategic analysis helps an organisation to understand more about its strategic position and to construct answers to questions such as: What is happening to our business environment? What do we need to know about our markets and customers? What new options should we consider? How can we develop our competences to meet all of the changes in the business environment? By...
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Page 3: Ansoff´s product/market matrix

Ansoff's product/market matrix is an accepted way of identifying and categorising market and product developments and opportunities. Amway makes good use of the technique. The matrix identifies various strategies open to organisations, and splits them into four categories. For example, when selling existing products to existing markets, organisations can look to improve their penetration of...
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Page 4: Market penetration

Going for market penetration has involved Amway in making the most of current products and competences by 'stretching' them to improve Amway's competitive position within existing markets. One great benefit of direct selling is that it is an immediate channel to the marketplace that offers customers a good service, while at the same time providing business opportunities for...
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Page 5: Product development

Product development is a particularly appropriate strategy where an organisation is strong in research and development. Product development is highly important for products that have comparatively short life-cycles. Within Amway there are approximately 500 active research and development projects in progress at any one time. With around 575 staff involved in research processes, and with...
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Page 6: Market development

Market development involves taking existing products into completely new markets. One method used by Amway involves expanding the ways in which individuals can be involved with the Amway business. Amway has developed a structure known as the IMC model. This increases the number of ways through which people can become involved in the Amway business. Each of the letters IMC stands for a...
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Page 7: Diversification

Ansoff pointed out that a diversification strategy stands apart from the other three strategies. The first three strategies are usually pursued with the same technical, financial, and merchandising resources used for the original product line. Diversification, however, usually requires a company to acquire new skills, new techniques and new facilities. This implies significant...
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Page 8: Conclusion

In today's highly competitive environment, an organisation has to develop a business strategy that provides a strategic fit between its resources and the changing business environment. This case study illustrates how Amway has continued to develop by using a range of strategies based upon Ansoff's product/market matrix. These strategies have enabled Amway to build its business by continuing...
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