Glyndwr Marketing Ltd is using an Ansoff marketing matrix as a framework for deciding upon its potential strategies for future growth.
finance
Description
Glyndwr Marketing Ltd is using an Ansoff marketing matrix as a framework for deciding upon its potential strategies for future growth.
A series of Ansoff growth strategies can set the direction for the company‘s strategy such as market penetration (project A), market development (project B), product development (project C) and diversification (project D).
At present, the company is not willing to consider project C (product development) and D (diversification strategy) owing to the risks involved in manufacturing and marketing new products.
Following market and financial research conducted by the company, the expected cash
flows of two marketing projects (A and B) for the next three years are provided in the table
below.
As the accounting consultant of Glyndwr Marketing Ltd, you are required to provide critical advice to a client on the best investment decision, on whether to invest in marketing projects A or B.
In order to maximize the investment return to your client, you are required to employ several
investment appraisal techniques such as the techniques of PP (Payback Period), Discounted
PP, ARR (Accounting Rate of Return), NPV (Net Present Value), IRR (Internal Rate of
Return) and Sensitivity Analysis.
