Ansoff's Growth Strategies

Growing a business by developing products and markets

A Beiersdorf case study

Page 1: Introduction

A business that grows is often better placed to meet its customers' needs. Growth can also help a business to stay ahead of its competitors. Beiersdorf is the skincare company behind leading brands NIVEA, ELASTOPLAST, ATRIXO and EUCERIN. Over the past 10 years the company has grown consistently and rapidly through a carefully controlled and well managed expansion of its portfolio of products.

This Case Study looks at how the company has experienced consistent growth by developing new products and markets. It uses Igor Ansoff's business matrix, with real Beiersdorf cases, to illustrate ways in which a company can plan its growth successfully.

Page 2: Growth

Growing a business can involve increasing:

* turnover (the value of sales)

* profits

* size and share of the market

* number and range of products

* company's geographical spread

* number of employees.

When a company grows it will expand into areas that offer new opportunities. It will also cut back in areas that are not performing as well or are in permanent decline. A company can grow internally by ploughing back profits into the business and building on its successful areas. This is organic growth. A business can also grow externally by taking over other successful businesses. Beiersdorf engages in both types of activity. It concentrates, however, on organic growth. This is not surprising. The NIVEA brand is so well known worldwide that it makes sense for the company to build organically on an established success story. Beiersdorf's recent developments illustrate three main ways in which firms can achieve organic growth. It has done this by:

1. Developing new product categories, e.g. NIVEA FOR MEN.

2. Moving into new countries. Since the 1980s, Beiersdorf has expanded into many Eastern European economies. Today, it has a growing presence in China, a rapidly expanding market.

3....