Ansoff matrix analysis
Ansoff matrix analysis aims to indicate the potential areas of growth for companies within the market segment. It does this by examining the existing and future product and establishing the existing market or creates new market by developing new product.
-search , advertising
New product development
-, alerts, calendar, news, image, checkout, maps, Google, Gmail, docs, Picasa
-Google has made numerous products available easily thus are able to reach to more customer.
Google has diversified through alliance and acquisition
Fig 1. The Ansoff matrix (Stimpson, P. (2008)
Market penetration strategy is centered on the existing product in already established market. It aims at stimulating growth and increase the market share. Market penetration uses minimum resources and thus provides minimum risk of penetration. Initially, Google entered the US market with search engine and it used the penetration strategy and has already captured a big market share. The company then launched AdWord. this was a new product for new market. The products allowed business to put advertisement on Google search. Since then the company has introduced numerous other product thus creating a strong brand, with the aim of attracting more customer. By simply maintaining their market share, will lead to growth
To this end Google has opened offices in other places. Google continue to use market development strategy by opening their offices in a different part of the world. Google understand that by increase in number of internet users will in turn bring more users to them. The company has thus encouraged free internet access with citywide wifi. Also it has developed many product to attract the uses to use Google, this in turn promote their advertisement space thus increase their revenue. Most of these products are offered for free. Their product is more about gathering information from their customer. This enable the company to give relevant search and eventually it will be able to personalize it advertisement according to customer’s hobbies and interest. Personalized advert is the dream of every advertising company. This will give them a competitive edge and increase their market share.
New product development.
New product development focuses on bringing a new product to existing business market. Over the years, Google has improved their search engine technology. They have add more features that will make their engines more users friendly. Google has developed more products such as maps, Picasa, earth, docs, etc. by making such product available cheaply they meet wide range of customers wants. This will make them dominate the world markets.
Another strategy put forward by Ansoff, is diversification. The strategy in evolves developing new products for completely new and unfamiliar market. The company does this by diversification, alliance and acquisition. Through acquisition, Google has diversified to other product such as docs, earth and YouTube. This product has expanded the company’s brand and brought the previous user of such company to Google. Organization such as open social aims to capitalize on alliance. Open social allow developers to create applications that will work on all the member companies. By allowing all the developer to use common API, Google aims to compete with social networking site such as face book.
Google understood the benefit of diversification. It is always ready to explore new opportunities has invested in research.
Stimpson, P 2008, Business Studies.Cambridge University Press.
Ansoff matrix analysis