Igor Ansoff was a Russian-American applied mathematician and business manager known as the "father of strategic management". He introduced several important strategic management concepts, including the product-market growth matrix, environmental turbulence, and vertical/horizontal integration. Ansoff taught strategic management as formulating, implementing, and evaluating cross-functional decisions to achieve organizational objectives by adapting to the business environment through strategic planning.

1. Igor Ansoff:
Father of Strategic Management
Presented By
Anush Joseph
MPOB, MBA, ASIET
Prof. Nimal C Namboodiripad

2. Biography
• Igor Ansoff was born in Vladivostok, Russia, on December 12,
1918.
• Graduated from Stuyvesant High School, New York in 1937
• Studied General Engineering at Stevens Institute of
Technology and also completed MSc from the same institute.
• Did doctorate from Brown University
• He was an applied mathematician and business manager.
• He is known as the father of Strategic management.
• He taught for 17 years at the U.S. International University
• He died of complications from pneumonia on July 14, 2002.

3. Ansoff’s contributions
• Real-time strategic management
• Product-Market Growth Matrix
• The concept of Vertical/Horizontal integration
• The concept of environmental turbulence

4. Strategic management
• Strategic management function formulates,
implements and evaluates cross-functional decisions
that will enable an organization to achieve its
objectives.
• The process specifies the organization's objectives,
develops policies and plans to achieve these
objectives, and allocates scarce resources to
implement the policies and plans to achieve the
objectives

5. Strategic management
• Strategic management involves adapting the
organization to its business environment.
• Strategic management affects the entire organization
by providing direction.
• Strategic management involves both strategy
formation (he called it content) and also strategy
implementation (he called it process).

6. Strategic management
• Strategic management is fluid and complex. Change
creates novel combinations of circumstances
requiring unstructured non-repetitive responses.
• Hence, strategic management in many cases is
partially planned and partially unplanned.
• Strategic management is done at several levels:
overall corporate strategy, and individual business
strategies.

7. Environmental Turbulence
• By the 1980s change, and pace of change, had
become important for managing organisations.
• The issue of environmental turbulence underlies
Ansoff's work on strategy.
• However, if some organisations were faced with
conditions of great turbulence, others still operated
in relatively stable conditions. Consequently,
although strategy formulation had to take turbulence
into account, one strategy could not fit every
industry.

8. Environmental Turbulence
• There are five levels of environmental turbulence
outlined as:
– Repetitive--change is slow, and predictable
– Expanding--a stable marketplace, growing gradually
– Changing--incremental growth, with customer
requirements altering fairly quickly
– Discontinuous--characterised by some predictable and
some complex and sudden changes
– Surprising--change which cannot be predicted and which
both develops, and develops from, new products or
services.

9. Ansoff Matrix(Grid)
Product-Market Strategies
Existing New
Market Product
Penetration Development
Existing (Expansion)
Market
Development Diversification
New (Expansion)

10. Market-Penetration Strategy
It seeks to increase market share for present
products or services in present markets through
greater marketing efforts.
You have to take care of competitive reaction and
cost of conversion
Example: Airlines use reduced fares & promotion like
various family travel packages to penetrate market

11. Product-Development Strategy
Is a strategy that seeks increased sales by
improving or modifying present products or
services.
For example McDonald’s starting Veg. burgers in
India
The following have to be considered when going
for this strategy
– Market size/volume
– competitor reaction
– effect on existing products
– resources to deliver new products

12. Market-Development Strategy
• Involves introducing present products or
services into new geographic areas.
• It may be also targeting new segments in the
same market.
Have to be careful of competitive reaction,
understand new buyers and adaptability

13. Diversification
• When there is need to grow continually but there
is a limit in the present line of business you go for
diversification
• It means entry into new line of activity other than
your traditional business. Hence this is different
from the other three strategies and a lot more
riskier.
• There are three types of diversification
– Horizontal
– Concentric and
– Conglomerate

14. Concentric diversification
• Concentric diversification includes adding new, but
related, products or services.
• Eg. Masala manufacturers getting into manufacture
of ready to eat food items.

15. Horizontal diversification
• Horizontal diversification includes adding new,
unrelated products or services for present
customers.
• For example, a company that was making
notebooks earlier may also enter the pen market
with a new product.

16. Conglomerate diversification
• Adding new, unrelated products or services is called
conglomerate diversification
• Eg. Reliance getting into the mobile phone business.

17. Integration
• Diversification can be classified by the direction of
the diversification.
• Integration can be either
– Vertical or
– Horizontal
• Integration can be done either by
– Purchase of competitors or
– Starting own business

18. Vertical integration
• The term vertical integration describes the degree to
which a firm owns its upstream suppliers and its
downstream intermediaries/ buyers.
• Vertically integrated companies are united through a
hierarchy and share a common owner.
• Usually each member of the hierarchy produces a
different product or service, and the products
combine to satisfy a common need.
• Vertical integration is typified by
– Backward integration and
– Forward integration
– Balanced integration

19. Forward integration
• Forward integration involves gaining ownership or
increased control over distributors or retailers
• Forward Integration is when you are entering into
subsequent stage – eg.Harissons Malayalam
Plantations getting into packaged tea, Mafatlal
getting into readymades

20. Backward integration
• Backward integration is a strategy of seeking
ownership or increased control of a firm’s suppliers
• Backward Integration is entering preceeding stage
of business eg.Brooke Bond getting into plantation
business, Reliance into petroleum mining

21. Balanced integration
• In balanced integration, the company sets up
subsidiaries that both supply them with inputs and
distribute their outputs

22. Horizontal integration
• Horizontal integration refers to a strategy of seeking
ownership of or increased control over a firm’s
competitors eg. Tata Oil Mill being taken over by HLL
or Tata’s taking over Tetley
• Horizontal Integration is entering same level of
business in same industry
• To get market coverage, subsidiary companies are
created which markets the product to a different
market segment/geographical area.

23. Written Works
• His written works include:
– Corporate Strategy published in 1965
– Business Strategy, 1969
– Strategic Management, 1984
– The Firm: Meeting the Legacy Challenge,1986
– The New Corporate Strategy, 1989
– And more than 120 other published papers and
articles translated into 8 languages

24. Honours
• Netherlands has established an Igor Ansoff Award in
his name for research in Strategic Planning and
Management
• Vanderbilt University has established an Ansoff MBA
Scholarship
• The Japanese Strategic Management Society also has
established an annual award in his name.

25. Thank you
Source: http://en.wikipedia.org/wiki/Igor_Ansoff
http://www.easy-strategy.com/igor-ansoff.html