Ansoff Matrix

Is your business  revenue growth rate below your expectations?

 Are you planning to :

·       sell more in the existing market?

·       enter into a new market?

·       develop a new product? or

·       move away from the existing core business?

If your answer is Yes, then this analytical tool is definitely useful to you.

This is a 2 by 2 matrix, which offers, 4 different business growth options for business organizations.

Guess, what we are talking about!

In this blog post, I am talking about,   business analytical tool, the Ansoff matrix.

The Ansoff Matrix is a strategic planning tool that provides a framework to help executives, senior managers, and marketers devise strategies for future growth. It is named after Russian American Igor Ansoff, an applied mathematician, and business manager, created the concept.

There are four possible growth strategies!

Market penetration, Here business firms seek to achieve a growth rate with existing products in their current market segment. This is the least risky strategy.

Market Development, here firms seek to achieve growth by selling existing products in the new market segment.

Product development, here, firms   seek to  achieve growth by   offering new  products in the existing market segment., and finally,

Diversification, his strategy focuses on reaching new markets with new products. Diversification can be either related, or unrelated.

To sum it up,

Ansoff matrix offers, four different growth options:

1.      Market penetration.

2.      Market Development.

3.      Product Development, and

4.      Diversification.

If you find this blog post is useful, please post your comments below.

Revenue expenditure and Capital Expenditure  Worksheet for IB, A Level  and IGCSE Students.

Get Connected (GC)

 Get Connected (GC) manufactures smartphones and other audio related electronics gadgets.  GC also supplies electronics goods components to some of the local unbranded manufacturers. The company targets college students and fresh graduates. Get Connected is known for premium products with high-quality customer services.

Currently, GC has two manufacturing units where more than 200 people are employees at various levels, and one assembly unit where   the final products are assembled using high-tech assembly machines and robots. Some of their components of smartphones are outsourced to quality and reliable suppliers.

GC also rented a high-tech warehouse near the airport for easy transportation of their final products and components.  The finance manager reported that GC’s revenue expenditure is increasing steadily.

Questions:

a)      Define the term ‘capital expenditure’ [ 2 marks]

b)      Define the term ‘revenue expenditure’ [ 2 marks]

c)      With reference to GC, identify   4 examples of revenue expenditure and four examples of capital expenditure. [ 4 marks]

d)       Explain two differences between capital expenditure and revenue expenditure. [ 4 marks]

 Qubit Kart Appliances( QAP) Plc.

Qubit Kart  Appliances  is a  global conglomerate,  which manufacturers electrical goods, both for household, and industrial purpose, smart phone spare parts, sports equipment, garments, and  medical equipment. In 2018, Jacob Monk, took over as chairman of chief executive officer at Qubit Kart.

Jacob immediately decided that, Qubit had to make major changes to organisation structure and positions if Qubit was to survive, and grow in this competitive  globalised business. Jacob held series of meetings, with various regional heads, to understand the current challenges, and opportunities.

The company has prepared the   report which consists of major findings and measures to be taken.

• ·       Aggressive market penetration strategy where Qubit holds a significant market share and reputation.
• ·       Redefine objectives, and strategies to give direction to employees.
• ·       Extensive research, where there is a possibility of growth potential in secondary and tertiary sectors.
• ·       Closedown underperforming divisions like sports equipment,  and garments.
• ·       Reduce the overall workforce by 20 percent.
• ·        Further extensive training for energetic and dynamic regional heads.
• ·       Replace regional managers, who  are  failing to meet performance targets.
• ·       Explore tertiary sector areas like education, tourism, investment, and banking.
• ·       Draft ethical objectives, and focus on corporate social responsibilities.
• ·       Extensive strategies  to face threats of  increasing  globalisation.

However,  the implementation of  the above will involve  a huge financial cost and hence, the global finance director of Qubit Kart  Appliances may not support all of them.

Questions