Ansoff Matrix

Ansoff Matrix

Effective leaders understand that they cannot stick to a “business as usual” attitude even when things are going well if their organization is to grow in the long term. They need to find new ways of growing income and appealing to new clients. Many choices are available, such as creating new products or entering new markets

Ansoff Matrix is often known as the Ansoff product and Product/Market Expansion Grid Market Growth Matrix is a marketing strategy method that typically allows a company to assess product and market growth. This is generally decided by concentrating on whether new or existing products are available and whether the market is now existing. The matrix shows four strategies that can be used to help a firm expand and the risk associated with each strategy is also evaluated. This model was developed by H. Igor Ansoff. Ansoff was a mathematician with expert knowledge in business management.

The four strategies of Ansoff Matrix are:

  1. Market Penetration
  2. Product development
  3. Market development
  4. Diversification

Market Penetration:

Typically, when we look at market penetration, it covers products that are existing and that is also existent in an established market. Under this strategy, further manipulation of the products can take place without actually altering the product or the product outlook. It would be possible by using promotional strategies, putting in place different pricing policies that could draw more customer base, or could make the distribution wider.

The risk involved in its marketing strategy is typically the least as the products are already known to customers and the developed market is likewise. Another way to improve market penetration is to come up with different strategies that will promote increased use of the product.

For example, telecommunication companies all cater to the same market and employ a market penetration strategy by offering introductory prices and increasing their promotion and distribution efforts.

Product Development:

New products are launched into developed markets as a part of the product development strategy. Product creation may vary from the launch of a new product in an existing market or may require an existing product change. By changing the product, one will possibly alter its outlook or appearance, boost the efficiency or quality of the products. This will make it more attractive to the already established market.

For example, automotive companies are creating electric cars to meet the changing needs of their existing market. Current market consumers in the automobile market are becoming more environmentally conscious.

Market Development:

This strategy is often known as market expansion. The firm markets its current goods to new markets under this strategy. This can be made possible by further segmentation of the market to help establish a new group of clienteles. This approach is based on the assumption that the existing markets have been completely penetrated and hence the need to penetrate new markets.

For example, sporting goods companies such as Nike and Adidas recently entered the Chinese market for expansion. The two firms are offering roughly the same products to a new demographic.

Diversification:

This growth strategy includes targeting a company or, at the same time, introducing new goods to new customers. Among the others, it is the riskiest strategy, as it involves two unknowns, new products are developed and the company is unaware of the production problems that may occur in the process. There is also the fact that a new market is being entered which will carry with it the issue of having unknown features. For a company to take a step towards diversification, they must have their facts correct as to what it intends to benefit from the plan and have a reasonable understanding of the risks involved.

There are two kinds of diversification:

  1. Related Diversification: The existing business and the new product/market have potential synergies to be discovered. For example, A leather shoemaker starts a line of leather wallets or accessories pursues a similar diversification strategy.
  2. Unrelated Diversification: There are no possible synergies between the existing business and the new product/market to be achieved. For example, A leather shoemaker begins manufacturing phones, pursues an unrelated diversification strategy.

 

Source: https://www.ansoffmatrix.com/       

20 thoughts on “Ansoff Matrix”

  1. Only desire to say your post is spectacular. The clearness as part of your put up is quickly remarkable and i can assume you happen to be an authority on this area. Properly together with your permission permit me to grab your rss feed to keep as much as date with succeeding put up. Thanks a million and please continue to keep up the superior do the job.

  2. My sister bookmarked this internet site for me and I have been reading through it for the past couple hours. This is really going to benefit me and my friends for our class project. By the way, I like the way you write.

  3. Socjologia Pracy

    great post, very informative. I wonder why the other experts of this sector do not notice this. You must continue your writing. I am sure, you have a huge readers base already!

  4. Hi! There are certainly a lot of details like that to take into consideration. That is a great point to bring up. I offer the thoughts above as general inspiration but clearly there are questions like the one you bring up where the most important thing will be working in honest good faith. I don?t know if best practices have emerged around things like that, but I am sure that your job is clearly identified as a fair game. Both boys and girls feel the impact of just a moment’s pleasure, for the rest of their lives.

  5. Youre so cool! I dont suppose Ive read something like this before. So good to find any person with some unique ideas on this subject. realy thank you for starting this up. this website is something thats needed on the web, somebody with a little bit originality. helpful job for bringing something new to the internet!

  6. faves, since I was here were a few. Well another article that will work out just fine. I need this article just finishing up, fortunately for me it is on a similar subject as this post. Glad, have a good one.

  7. Wonderful learn, I simply handed this onto a colleague who was doing some research on that. And he truly bought me lunch as a result of I discovered it for him smile So let me rephrase that: Thanks for lunch! Anyway, in my language, there arent much good supply like this.

  8. What does it mean to increase friction? I would be really useful if anyone can react to that concern. I’m caught with this difficulty for previous 7 days and I’m not able to uncover properties answer for that issue. Any response will be very appreciated. Thank you extremely considerably and have a great day. Apologies for my weak english language. Cheers !

  9. My brother recommended I might like this blog. He was entirely right. This post truly made my day. You can not imagine simply how much time I had spent for this information! Thanks!

  10. My sister saved this website for me and I have been reading through it for the past several hours. This is really going to assist me and my friends for our class project. By the way, I like the way you write.

  11. Hello I am so grateful I found your blog page, I really found you by accident, while
    I was browsing on Google for something else, Anyways I am here now and would just like to say many thanks for a marvelous post
    and a all round enjoyable blog (I also love the theme/design), I don’t have time to
    read through it all at the minute but I have book-marked it and also included your RSS feeds, so
    when I have time I will be back to read much more, Please
    do keep up the fantastic work.

Leave a Comment

Your email address will not be published.