Audi is an automobile manufacturer based in Germany with headquarters in Ingolstadt. The company is involved in the designing, manufacturing, and marketing of different luxury vehicles. The company has nine production units across the globe (Audi, 2019). The company was found by August Horch in 1910. It is one of the leading luxury automobile brands in the world. The company produces sedans, hatchbacks, and a variety of other vehicle designs. The products of Audi are known for their unique and creative designs, innovative features, and the use of advanced technology. The company produces approximately two million units each year. In 2018, the company earned revenue of 59.248 billion Euros and had more than 91,000 employees (Audi-2, 2019).
Following are the four dimensions of the Ansoff Matrix for Audi:
Market Penetration
Selling existing products in existing products is called market penetration. Audi does this in various ways. The first strategy is to execute marketing and advertising strategies that promote existing products through social media, electric, and press media. The company continues to innovate and increase its product quality and luxury factor that helps create barriers for entry for new competitors. Audi always works to step up the luxury vehicle market to reduce competition. The company also improves its products regularly to ensure it matches the needs of the customers. The company also advertises various models to existing Audi owners to motivate them to try other vehicles. Audi also is involved in various sporting events as a sponsor to highlight its brand and various automobile models. This also helps improve brand reputation. All of these measures help increase sales.
Market Development
Audi develops its markets by promoting its existing products in new markets. The first strategy that Audi adopts is expanding its geographic markets. Audi already operates in various nations where it sells its products directly or indirectly through authorized sellers. In various nations, the company has entered into strategic alliances with automobile marketers to sell its products. There is great potential for Audi to expand in this regard into other nations to boost its sales in new markets. The company also selects the models it wants to promote different markets based on market demographics. Since the company has limited production units, the products have to be exported causing the prices to increase when the products are marketed in different markets. Various markets also have higher taxes for luxury automobiles causing prices to further rise. These factors create difficulty for Audi in geographic expansion.
Product Development
Launching new products in existing markets is product development. Audi is known for its innovation and new designs. Audi does product development by launching new models of various automobile variants regularly. Audi also launches new variants of already launched models to increase product variety. The company also launches brand new models after a few years to develop more variety. Audi regularly invests in extensive research and development for new designs to ensure it leads the market in product development. This allows the company to launch new products that are highly creative and innovative. When geographically expanding, the company also tests the market and adjusts its models before launching them. The product development team of Audi ensures that the company leads the market. In the luxury automobile industry, product development plays a vital role and Audi understands that (Audi-3, 2019).
Diversification
Diversification is the riskiest of the various strategies. Audi has room for diversification in horizontal diversification by expanding into various other related industries such as heavy vehicles, bikes, electric vehicles, and various other industries. The company also can vertically diversify by establishing its retail outlets, manufacturing its own spare parts, establishing a foundry to produce metal parts, and so on. In each case, the company will require extensive investment. The company can also attempt conglomerate diversification by entering various unrelated industries such as consumer electronics, chemicals, metals, and so on. The company can benefit from the brand repute Audi has. It will create in marketing new products and stepping into new industries. Brand loyalty may also help ensure success and greater sales. However, diversification is a risky strategy and Audi needs to carry out extensive studies before it should attempt any diversification strategy.
References
Audi, 2019. Company. [Online] Available at: https://www.audi.com/en/company.html [Accessed 31 Dec 2019].
Audi-2, 2019. The Audi Group in figures. [Online] Available at: https://www.audi-mediacenter.com/en/overview-of-audi-5702/the-audi-group-in-figures-5706 [Accessed 31 Dec. 2019].
Audi-3, 2019. Products & Services. [Online] Available at: https://www.audi.com/en/company/sustainability/core-topics/products-and-services.html [Accessed 31 Dec. 2019].