ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Charities
    5. Coronavirus
    6. Corporate and financial reporting
    7. Business and governance
    8. Ethics
    9. Insolvency
    10. ICAS Research
    11. Pensions
    12. Practice
    13. Public sector
    14. Sustainability
    15. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

Business Acumen: Tunnock's, diversification and the Ansoff Matrix

  • LinkedIn (opens new window)
  • Twitter (opens new window)
By Graham Foster

14 September 2020

  • Tunnock’s has collaborated with Glen Affric Brewery and The Craft Beer Channel to create Metric Tunnox.
  • A prime example of diversification within the Ansoff Matrix.
  • Further explores the concepts of Business Acumen Module 13: Strategy & Analysis.

Business Acumen Lecturer, Graham Foster, explores the strategic concepts behind the Tunnock's brand and their collaboration to launch “Metric Tunnox”.

Tunnock’s is a Scottish brand known for tea-break favourites such as its Snowballs and Teacakes, but it recently announced the launch of a sweet stout, with a relatively high alcohol content of 9.5%. ‘Metric Tunnox’ is sold in a gold and red striped can that evokes the very recognisable branding of Tunnock’s Caramel Wafers. This was created in collaboration with Glen Affric Brewery and The Craft Beer Channel.

The TC Business Acumen course is largely focused on the experiences and needs of start-up enterprises, however, there comes a point, both for new businesses and for well-established brands like Tunnock’s, where they need to answer the question, ‘what next?’.

The Ansoff Matrix

Business Acumen introduces an ideal tool to help a businesses think through this decision. This tool is known as the ‘Ansoff Matrix’ (see below):

The Ansoff matrix

Ansoff’s Matrix considers decisions about business development and growth by considering two questions:

  • Should we focus on existing products (which include services) or seek to develop new products?
  • Should we focus on our existing markets, or seek to develop new markets?

These two questions, in combination, create four options.

1. Market penetration

Firstly, a business could seek to grow by selling more of its existing product in markets where it already competes. This is known as market penetration. For a business like Tunnock’s, that would entail promotional activities like advertising campaigns and discounting to gain market share, at the expense of rival snack brands.

This can be very challenging, as competition may be intense, but it is seen as relatively low risk as the business will know its own products well and should also have a good understanding of its current and target customers.

2. Product development

Product development means developing a new offering for a market that it is already familiar. For a business such as Tunnock’s, that would mean researching, developing, testing and eventually launching a new snack. There may be a lot of fixed costs spent in development, promotion and production capacity, but it has the advantage of refreshing the portfolio of products and keeping the brand fresh and relevant.

3. Market development

Market development means taking an existing product into a new market. This could entail geographic growth and selling into new regions or countries. Alternatively, it could involve targeting new demographics by, for example, promoting a product to new age groups. This may be costly due to promotional activities and the need to build up capacity.

One of the key risks is that the business may lack a detailed understanding of the needs and wants of customer groups that competitors may have been serving for decades. The difficulties experienced by Tesco in breaking into the Chinese market, with their eventual withdrawal in 2014, shows how hard this move can be even for the best-resourced businesses.

4. Diversification

But the riskiest option is generally seen as being diversification, as this embraces the dual challenges of product and market development in one bold step.

The launch of Metric Tunnox is an example of diversification as confectionery snacks and craft beer are quite distinct products and the markets for each are also distinct in the way they operate, not least because craft beer cannot be sold to children.

Collaboration

One of the ways in which businesses can overcome the risks of product and/or market development is through collaboration. In a business collaboration, different parties may be able to contribute complementary elements to a new venture.

For example, Tunnock’s may not have the technical knowledge required to make craft beer, or a detailed knowledge of customer tastes or trends in that market, but its collaborative partners do, and Tunnock’s can offer a strong retail brand with wide recognition among consumers.

Although Tunnock’s is clearly a well-established business, this lesson may be particularly relevant to start-up businesses who are likely to lack the resources required to develop or acquire the expertise or capacity required to develop new products or enter into new markets on their own.

Learning blog

Gain useful hints, tips and insights from ICAS lecturers.

2-23-totumpro 2-23-totumpro
ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: