PULL-OUT SECTION

ADVISOR
A message from Steve Peet
HELLO again, and welcome to another edition of Student Advisor. In this issue, we are presenting you with the first in a series of articles on applying strategic fools of management. Mark Richardson's and Carl Evans's article on Applying Ansoff's Matrix is a thorough and succinct guide to this essential tool. They then provide us with a Case History of the matrix in action through their own professional experiences of using it at the University of Worcester Business School. The correspondence I have received from you, and the many conversations I have enjoyed with our readers, have confirmed something that 1 have always known - namely that there is a great thirst for knowledge out there, and that this continues long after you have ceased to be students and gained your lAM qualifications.

In a sense, we never stop learning and with this thought in mind, the article which follows (as weli as later ones in the series) will seek to inform not only students of the Institute, but also the many qualified lAM professionals who ai . committed to Continuous Professional Development and best practice in the field of Administrative Management.

Don't forget. If you have any thoughts or feedback, or if you would like to make any contributions to Stud&it Advisor, please contact me through Roy Bass on roybwamersgraup.co.uk

Strategy in Action Applying Ansoffs Matrix

by Mark Richardson and Carl Evans
Despite being 50 years old, Ansoff's Matrix still provides a valuable analytical tool to help inform strategic direction. This article reminds you of the matrix, demonstrates how it can be applied in a contemporary setting, and challenges you to apply the matrix to your own organisation.

About the Authors

Mark Richardson is Head of University of Worcester Business School. Before entering academia, Mark was a marketing manager for Bass Taverns, with significant managerial experience of key marketing functions: market analysis, merchandising o p e r a t i o n s and r e t a i l promotions, '" Carl Evans is a Senior Lectu in the Business School 6. University of Worcester. Carl has a long association with the lAM. Having completed the Diploma (now Advanced Diploma) in 1986, he then became a Member of the lAM Council and a Chief Examiner, HP nnw sitsonthelAMQualU

What is Ansoff's Matrix?

Ansoff (1957) developed a framework to generate alternative strategic directions for an organisation, through considering its product-market options. The options generated support corporate growth objectives, which for this model, are deemed a priorityPossible growth opportunities are found by combining existing and new products/services, and existing and new markets. The options are then presented in a matrix to reveal four distinct strategic alternatives.

Figure 1 r
Existing Market ,ew Market Market Development Existing Product New Produc Development Diversification

(Ansoff. 1957) Continued on page ii

Market Penetration
Through this route, an organisation will seek to increase its share of an existing market with its current products. This may Involve persuading existing users to use more, persuading nonusers to use, or attracting users from competitors. In this case, there will be an emphasis on competitive pricing, more effective use of marketing communication, or trying to encourage increased usage by existing customers, possibly through a loyalty or reward scheme.

in target student numbers of 50%, to be achieved over four years. It was apparent that if the Business School were to continue with its existing course offer and stance to the market, there would be a large gap between organisational growth requirements and the Business School's capacity to deliver growth. Figure 3: The Strategic Planning Gap Objective Strategic Planning GAP Forecast

Market Development
In this case, an organisation will seek to identify or create new market segments for its current product offer. The challenge here is to identify genuine and sustainable market segments.

Product Deveiopment
This involves the development of new products to sell in current markets. This activity could include enhancements to existing products, extensions to the existing product range, or genuine product innovation. However, the risks associated with new product development are well known. Time (Years)

It was apparent that the Strategic Planning Gap identified above could only be filled by a combination of: 1, Market Penetration Strategies 2. Market Development Strategies 3, Product Development Strategies 4. Diversification Strategies Figure 4: Closing the Strategic Planning Gap Objective Strategic 2 Planning GAP
Forecast

Diversification
Diversification involves producing entirely new product propositions for new markets. This is the riskiest of the four strategic approaches, especially, as Jobber (2006) notes, if it is not built upon existing core competences of the business. Figure 2: Ansoff's Matrix - Risk Analysis

(Figures indicate notional levels of risk) Ansoff's matrix therefore offers a useful tool for organisations to consider a range of strategic options for growth. This was the scenario faced by the University of Worcester Business School.

Time (Years)

Using Ansoff's Matrix to inform Strategic Direction

While Ansoff's matrix separates the potential strategic directions into four boxes, Johnson et al (2006) recognise that in practice, a combination of approaches are typically followed, and here the Business School has pursued various alternatives since January 2006, There are encouraging signs to date, with an increase of over 200% in student applications to the Business School for the year 2006/07, against the previous academic year.

The Matrix in Action. A Case History

The University of Worcester Business 5chool had, for several years, consistently recruited over 100 undergraduate students onto the BA (Hons) Business Management programme. However, with full university status (secured in 2005), and a highly ambitious growth agenda, came a significant increase

lit

Figure 5: Ansoff's Matrix in Action

I
Market Penetration
Improved marketing communications' notably enhancements to content and navigability of UCAS and University Websites and enhancements to the University prospectus, The development of a Business School prospectus and introduction of newsletters distributed to prospective students. Increased the number of open days.

Market Development
The newly gained University status was felt to broaden appeal across the UK and in overseas markets.

Product Development
The development of a new portfolio of undergraduate programmes: comprising 32 named awards, including 9 specialist pathways, The launch of an optional 1 -year business placement scheme

Diversification
The launch of four international "top-up" awards aimed at international markets, Entering into an agreement with the Anglo-Italian Institute (Ail) for the University of Worcester BA (Hons) Business Management degree to be delivered in English at the All in Rome,

Applying Ansoff's Matrix

Using Ansoff's matrix as a framework, consider possible directions for your own organisation or business unit: How can you get more out of existing customers? What segments/markets could you investigate? How can you enhance your product proposition? Into which other profitable business areas could you transfer knowledge, skills or your corporate brand? Be aware of the models limitations though. The four options should only give a broad indication of possible strategies to pursue; further research and analysis is still required since each will have its own issues, opportunities and resource implications. Moreover, the matrix does not reveal how to achieve the respective strategy (for example, should diversification be achieved through merger, takeover or alliance?). It also emphasises growth, which may not be an appropriate objective for the organisation at that time. Nonetheless, Ansoff's Matrix provides a unique, practical framework to consider how growth objectives can be achieved through marketing strategy.

References
Ansoff, H, 1.09S7) Strategies for Diversification, Harvard Business Review, 25(5), pp, 113-125,

Jobber, D, (2006) Principles and Practice of Marketing. 5th Ed. Berks, McGraw-Hill, Johnson, G, Scholes, K, and Whittington, R, (2006)
Exploring Corporate Strategy. Text and Cases. Harlow, FT Prentice Hall,