There are five levels of environmental turbulence introduced by Igor Ansoff which he determined to be

present in the business environment. That is Repetitive, Expanding, Changing, Discontinuous,

Surprising. It is a model of the business environment consisting of five turbulence levels, ranging from
placid and predictable to highly changeable and unpredictable.

The first level is defined as repetitive environment.

This is an environment which has no change and stable.
Under a free market economy, few organizations are operating in this environment except some
non-profit organizations.
The example of an organization in this environment is museum.
Hence, planning at Level 1 is extrapolative. Organizations do not change their products and
services unless forced by a threat to their survival.

Level 2 is expanding environment.

This environment usually found in the segment of the economy which growing gradually and
there has a stable marketplace.
Change is slow and incremental, visible, and predictable.
In this environment, customers needs are basic and not differentiate, demand usually exceeds
supply.
The main determinant in the purchase decision is price and production efficiency (cost
minimization) is the key success factor. Little attention is paid to the market and
Planning at level 2 is also extrapolative. Organization make incremental moves based on
experience and do not change their products and services unless forced by of threats from
competition.

Level 3 is changing environment.

In this environment, customer demands are differentiated by different buying power and product
preferences.
Change is fast and there is an incremental growth, fully visible, with different customer
requirements which change fairly quickly.
The key success factor shift from production efficiency to marketing effectiveness.
Planning at level 3 is also extrapolative. Organization seek to progressively improve their
products and services in anticipation of the changing customer needs.

Level 4 is defined as discontinuous environment.

Discontinuous environment is characterized as partial predictable, limited visible, complex,
discontinuity and sudden changes.
 In this environment, changes are faster than the companys ability to respond to the new change,
future is partial predictable
In order to be successful a firm must abandon its historical attachment to particular customers,
technologies, and/or products that it was accustomed to in Level 3 and formulate its strategy with
a new set of rules.
Production efficiency, marketing effectiveness and product responsiveness are the key success
factor.
There is no attachment to particular customers, technologies or products. Organization is
prepared to move to where it perceives the profits to be.

Level 5 is defined as surprising environment.

Surprising is unpredictable change which both develops, and develops from, new products or
services.
Change at this level occurs without notice, without visibility, unpredictable, and extremely rapid.
Customers are prepared to pay for the most advanced technology.
In order to become successful at this level, organization must be open and flexible to create
products and services with advanced innovative technological ideas.
Example, this is the environment that Steven Job created the personal computer.
 Existing

Ansoff Matrix
New

Product
Existing New

Market Product
Penetration Development
Market

Market Diversification
Development

Market-Penetration Strategy
It seeks to increase market share for present products or services in present markets through
greater marketing efforts.
Example: Airlines use reduced fares & promotion like various family travel packages to
penetrate market.
 Product-Development Strategy
Is a strategy that seeks increased sales by improving or modifying present products or services.
For example McDonalds starting Veg. burgers in India.

Market-Development Strategy
Involves introducing present products or services into new geographic areas.
Example, Starbucks selling their beans and bottled drinks in grocery stores.

Diversification
Involves introducing new products or services into new markets.
Include three three types of diversification, that is horizontal, concentric and conglomerate.
Example, a company that was making notebooks also enter the pen market with a new product.