Page 3: Ansoff's growth strategies
The business analyst Igor Ansoff outlined some important strategies for business growth. He identified four key approaches to growing a business. Beiersdorf's development illustrates all four.
- Market penetration: Increasing market share for a firm's products in its existing markets. Several approaches help to achieve this, including product improvement; updating and building/improving existing products.
- New product development: developing new products for existing markets.
- Market development: finding and developing new markets for current product lines. This is most suitable when existing products require only minor modifications to be suitable for new, overseas markets. It also helps if the product life cycle is similar in the different markets that the business serves. This will not always be the case.
- Diversification: developing new product markets outside the existing business. A firm will pursue this strategy where new markets are highly attractive. To do so, it may switch resources from some of its existing markets that it believes to be in permanent decline.
We can illustrate Ansoff's ideas on how to grow a successful business by taking examples of Beiersdorf's growth in recent years.