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How Can Ansoff Matrix Be Adopted By The Pharmaceutical Industry?

 

Introduction 

Companies strive to expand business growth in existing markets through new products and perform well in product development. A company often uses the market penetration strategy - one of the four alternative growth strategies in the Ansoff Matrix, for its products to achieve a growth strategy in existing markets. 

Whereas other companies follow a strategy of competitive pricing and aggressive marketing to attain their market penetration targets, pharmaceutical firms deliver a product development strategy that focuses on new products and services promotion to serve their existing customers in the market. 

What is the Ansoff Matrix?

Ansoff Matrix is also known as the product and market expansion network, a strategic tool used by companies to analyze and plan their growth strategy. The matrix enables managers to summarize all available growth strategies and assess the associated risks. Ansoff Matrix, also known as Product/Market Expansion Grid, is a tool to analyze and plan business growth strategies, supplemented to make the product portfolio more growth-friendly. The sustainable growth rate is the growth rate a company expects in the long term. The Ansoff Matrix refers to a business analysis methodology designed to provide a framework for identifying growth opportunities. For this decision to be made at the corporate level, you need to have the right strategic tools at your disposal to do so effectively.

Often designated as the Ansoff Matrix due to its grid format, it helps marketers identify opportunities to increase business sales by developing new products and services and entering new markets. It is used to assess opportunities for companies to increase their revenues and identify alternative combinations for new markets. The Ansoff model focuses on growth which means it is one of the most widely used marketing models. Leading pharmaceutical companies use Ansoff Matrix to understand market penetration, market and product development, and product diversification strategies to achieve more sustainable margins. 


How do pharmaceutical companies value the marketing penetration of the Ansoff Matrix?

Market penetration is achieved by increasing sales contact points to reach customers, improving dealer networks, increasing the lifetime value of customers, and increasing the basket share of total customer spending. A company can expand its customer base in the markets in which it exists by lowering prices, improving its distribution network, increasing existing production capacities, and more strategies in marketing.

Market development strategies have been in place in the pharmaceutical industry since 2005 to increase their business growth by introducing existing products into new markets. Market development strategies involve efforts on the part of the pharmacy to create new market channels for current products, including entering international markets, entering new domestic markets, and liaising with complementary companies to boost sales of existing products. As a pharmaceutical organization, whether it is in the supply chain or focused on a B2B or B2C audience, it must adapt to a specific marketing strategy to sell its products and services. The new product introduction was possible for the pharmaceutical industry in 2005, but it is a different strategy. 

Market penetration is not only used at a global or industry-wide level to measure the scope of a product or service but is also used by companies to evaluate their market share. A company's market penetration is expressed as a percentage, which means that a company's product represents a certain percentage of the total market for that product. Market development strategies and actions are needed to increase market share and penetration. Companies can use this knowledge to adapt their marketing strategy to generate optimal revenue through their unique market penetration strategy. Consider the search intentions of services in various markets that use Google Keyword Planner and UberInsights to inform market penetration.

If a pharmaceutical organization wants to sell more products in the current market, it desires to invest in the marketing budget more heavily. For example, a company changes a current product to offer customers, adds value for their purchase, or develops and markets a new product from its existing product offering. Classic examples are found in the pharmaceutical industry, such as Pfizer, Merck, and Bayer, which invest heavily in research and development (R & D) to develop new and innovative medicines.

A soft growth matrix indicates strategies that a company should use to grow to assess Pfizer's growth strategy. It helps a company determine its strategy for market growth and product growth. This strategy includes entering new markets with new products that are linked or not linked to the company's existing offerings, also known as a diversification strategy. The purpose is to sell more of its existing products in new markets, reach new consumer segments and grow by focusing on new geographical areas. It opens up new markets through new products and related businesses and not through existing product offerings.

Conclusion

Pharmaceutical companies are using the market penetration strategy to adjust their prices to beat other competitors in the same market. Businesses can incorporate market penetration into the Ansoff Matrix to understand the link to multiple employed strategies of a company to enable companies to scale their business and increase the market share of their products. By implementing this strategy, companies may attract more attention and generate revenue from different marketing participants. 
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