Market opportunity for Twitter using the Ansoff Matrix

Question

Analyse the situation that Twitter finds itself in now and utilising the Ansoff's matrix propose a way forward for Twitter?

Answer

The Ansoff matrix provides a means for organisations to analyse their market offering relative to the current and future potential marketplaces in which they operate, or would like to operate. The aim is to develop a suitable growth strategy which will take best advantage of market circumstances (Jarratt and Stiles, 2010). The matrix illustrates that a firm has one of four options for market expansion: 1) market penetration, 2) product development, 3)market development and 4) diversification. The theory suggests that these alternative strategies are ranked from the least risky (1 – market penetration), to the most risky (4 - diversification). However, Proctor (2014) explains that it is also important for organisations recognise that doing nothing is unlikely to be a successful long-term competitive strategy either, and therefore it will be necessary to make a strategic decision to follow one or more of these four approaches, provided they are mutually reinforcing. In the case of Twitter, their expansion has been phenomenal but the shelf-life of social media platforms is relatively short lived and they must continually adapt and develop (Grant, 2016). In light of increasing demand for social media it is recommended that Twitter look to adopt a dual strategy. This should include the following: option 2 in established domestic markets which are reaching saturation, and following option 3 in emerging markets in order to attract new users. These strategies should be sympathetic to one another and it is important to ensure that in the process Twitter do not lose their brand value or core focus.

References

Grant, R. M., (2016) Contemporary strategy analysis: Text and cases edition. London: John Wiley & Sons. Jarratt, D., and Stiles, D., (2010) How are methodologies and tools framing managers' strategizing practice in competitive strategy development? British Journal of Management, 21(1), 28-43. Proctor, T., (2014) Strategic marketing: An introduction. London: Routledge.