Using Ansoff Matrix to find the solution to the problem Essay


The ‘Fine thought ‘ besides known as ‘Fine letter paper ‘ is a Pvt limited company Company which was started in the twelvemonth 1995 by Mr. Kalpesh.S.Patel with the capital of Rs.50,000/- and he is the CEO and president of the house. They provide publishing services and are Manufacturers & A ; License of ‘Disney ‘ merchandises. Fine Ideas is maker of stationary, print publicity, table mats, mouse tablets, packaging, booklets and booklet, design points. It is a company along with moving as provider from Mumbai. The company besides gives thoughts and constructs for promotional activities. The company runs swimmingly and barely faces any jobs. Recently they faced a job of lessening in gross revenues.

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They are willing for variegation of their merchandises, to increase their gross revenues. Should they travel for variegation of their merchandises to increase their gross revenues or would it be excessively hazardous? This led me to come up with a research inquiry “ Should “ FINE IDEAS ” see variegation of their merchandises to increase their gross revenues? ”

With the aid of primary research and secondary information collected, I used Ansoff Matrix to happen the solution to the job. The chief ground for the lessening in sale is an addition in competition. The company is non strong plenty to confront challenges laid down by rivals. The research will propose an alternate way of variegation which if company chooses will be deserving its endurance in the market.

If the company does non come up with speedy and appropriate determination so it will hold to endure heavy loss. The research will analyse the place of the company in the market. The consequence found after analyzing the predominating market conditions and the company ‘s jobs is that the house should see variegation of their merchandises to come out of this job of lessening in gross revenues and to re-attain its forecasted gross revenues.


Diversification is portion of the four chief selling schemes defined by the Product/Market Ansoff matrix:

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Fine thoughts pointed out that a variegation scheme stands apart from the other three schemes. The first three schemes are normally pursued with the same proficient, fiscal, and trading resources used for the original merchandise line, whereas variegation normally requires a company to get new accomplishments, new techniques and new installations which can be provided by ‘Fine Ideas ‘ . The impression of variegation depends on the subjective reading of “ new ” market and “ new ” merchandise, which should reflect the perceptual experiences of their clients.

The schemes of variegation can include internal development of ‘Fine Ideas ‘ , acquisition of a house, confederation with a complementary company, licensing of new engineerings, and distributing or importing few merchandises manufactured by another house. By and large, the concluding scheme involves a combination of these options. This combination is determined in map of available chances and consistence with the aims and the resources of the ‘Fine Ideas ‘ .

Rationale of variegation

There are two dimensions of principle for variegation. The first one relates to the nature of the strategic aim: variegation may be defensive or violative. Defensive grounds may be distributing the hazard of market contraction, or being forced to diversify when current merchandise or current market orientation seems to supply no farther chances for growing. Offensive grounds may be suppressing new places, taking chances that promise greater profitableness than enlargement chances, or utilizing maintained hard currency that exceeds entire enlargement demands. The 2nd dimension involves the expected results of variegation: direction may anticipate great economic value or first and first great coherency and complementary to their current activities. In add-on, companies may besides research variegation merely to acquire a valuable comparing between this scheme and enlargement.

Factors of Risk involved for ‘Fine Ideas ‘ to Diversify.

Diversification is the riskiest of the four schemes presented in the Ansoff matrix and requires the most careful probe for ‘Fine Ideas ‘ . Traveling into an unknown market with an unfamiliar merchandise offering means a deficiency of experience in the new accomplishments and techniques required. Therefore, they will set themselves in a great uncertainness. Furthermore, variegation might ask important spread outing of human and fiscal resources, which may deflect focal point, committedness and sustained investings for the ‘Fine Ideas ‘ . Therefore they should take this option merely when the current merchandise or current market orientation does non offer farther chances for growing. In order to mensurate the opportunities of success, ‘Fine Ideas ‘ can besides execute different trials like the attractiveness trial, the cost-of-entry trial and the better-off trial. Because of the high hazards ‘Fine Ideas ‘ , may take to failure while trying to diversify. However, there are a few good illustrations of successful variegation like Walt Disney moved from bring forthing alive films to theme Parkss.

Companies like ‘Fine Ideas ‘ diversify for a host of grounds. In some instances, it ‘s a survival scheme. For case, if the company makes the majority of its gross revenues at a peculiar clip of twelvemonth, it makes sense to see variegation. However, there are plentifulness of other good grounds for variegation, non least by widening your scope of goods or services you can either sell more merchandises to your bing clients or make out to new markets. This can boost the growing chances of ‘Fine Ideas ‘ . And possibly the biggest ground for making it is to widen a trade name repute into other markets, with the cognition that doing your concern bigger than of all time imagined.


The analysis was done by discoursing with the proprietor of the house about the autumn in demand of gross revenues over the clip. It was non possible to happen the accurate lessening in gross revenues because their house was merely the provider and the goods so go in the godown of the selling house from where the goods were supplied to the retail merchants and jobbers. Due to diminish in demand for the bing goods by the people, the goods were logged into the godown of the selling sector and so they were non accepting the goods coming from the Fine Ideas as they already have stock with them. Henceforth with this analysis of the state of affairs it is clearly pictured that is a lessening in gross revenues for the company.

The treatments took topographic point in a positive mode as the current position proved that it was favorable and appropriate for the company to travel for variegation as that was the easiest manner out the job faced by them. Following subject goes out of my appraisal but I would wish to advert that they have already put their idea and attempts in diversifying their merchandises in some or the other manner by get downing their new concern names as ‘Facetoons ‘ which is a similar sort of printing house but they provide print on mugs, home bases, shirts and many more and hence the concern is turning quickly because of the increasing demand of their new thought. This case itself proves that it is really indispensable for them to get down to diversify their merchandises but they should non wholly shut down ‘Fine Ideas ‘ because that is their image and repute in market so they should work under the shadiness of ‘Fine Ideas ‘ .

Fine thoughts had been discoursing that concern schemes expand the range of making end through variegation into their concerns But, under rigorous premises of hazardous markets, there is no obvious rational for the company to get another. Diversification is a publicity scheme and a signifier of corporate scheme which is advised for ‘fine thoughts ‘ . It seeks to increase profitableness through greater gross revenues volume obtained from new merchandises and new markets. ‘Fine Ideas ‘ can diversify at the concern unit degree or at the corporate degree. At the concern unit degree they are most likely to spread out into a new section and at the corporate degree and it is besides really interesting come ining a promising concern outside of the range of their concern unit.


Reasoning by replying to my research inquiry, “ FINE IDEAS ” should see variegation of their merchandises to increase their gross revenues.

When to diversify for ‘Fine Ideas ‘

History tells us it ‘s non advisable to see variegation until the nucleus concern is stable and profitable. If ‘Fine Ideas ‘ are still fighting to win orders and construct a gross revenues clip for the nucleus merchandise, there is a existent danger that variegation will take your oculus of the ball.

The accelerator is frequently the realisation that growing in the nucleus concern is either decelerating or set to decelerate, frequently because the market for a peculiar merchandise is going saturated.

Diversification scheme for ‘Fine Ideas ‘

‘Fine Ideas ‘ can diversify by natural patterned advance. More radically, they extend the trade name by offering a much wider scope of merchandises that will however appeal to the same clients. Alternatively, they can utilize the strength of trade name to travel into new markets.

Another popular concern variegation scheme is to look backwards and forwards along the supply concatenation for chances to fasten your clasp on the market. For case, in the recent yesteryear people had seen edifice societies purchasing estate agents and computing machine makers purchasing resellers. In the US Google has busily acquired the taking web informations analysis tools, on-line advertisement companies and the societal webs and sites that deliver what they unerringly know their users want.

The cons for ‘Fine Ideas ‘

The company can acquire a hope for the drawn-out merchandise life rhythm. Diversification can set you on the fast path to growing but if the scheme fails it can besides fire up money. Expanding the merchandise scope and even if turnover additions, the addition in costs could ensue in a slack in net incomes. Widen the trade name into new markets and there is a danger that it will hold no resonance with the freshly targeted clients. Thus it ‘s critical to research new markets before diversifying.

‘Fine thoughts ‘ should besides look carefully at their bing concern. Do they have the right directors to get by with a divaricating scheme? Should they incorporate the diversified concern into one company or pealing fencing the new operation as a concern in its ain right? And is your organisation strong plenty to be an umbrella trade name where your nucleus values resonate across the group? They should believe difficult before ‘Fine Ideas ‘ commit their fundss and cherished clip.

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Hoang, Paul, Business and direction, IBID Press, 2007

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