Ansoff Matrix

 

The Ansoff Matrix, also known as the Product/Market Expansion Grid, is a two-by-two framework used by management teams and analysts to plan and evaluate growth initiatives (Kyle Peterdy, 2023). Hence, Ansoff Matrix is a widely used marketing model that evaluates growth opportunities for companies by presenting alternative combinations for new markets, products, and services, offering four strategies which is shown as below (Annmarie Hanlon, 2021).

Figure: Ansoff Matrix

 Each box of the Matrix links to a specific growth strategy. They are;

1. Market Penetration: The concept of increasing sales of existing products into an existing market.
2. Market Development: Focuses on selling existing products into new markets.
3. Product Development: Focuses on introducing new products to an existing market.
4. Diversification: The concept of entering a new market with altogether new products.

The Ansoff Matrix provides a framework for businesses to evaluate and choose the most suitable growth strategy based on their current situation and objectives. Each quadrant of the matrix represents a different risk level, with market penetration being the least risky and diversification being the riskiest. Companies often use this tool as part of their strategic planning process to guide decision-making regarding growth and expansion.

References

1. Ansoff, H. (1957.) 'Strategies for Diversification,' Harvard Business Review, Volume 35, Issue 5, October 1957.
2. Pererdy K. (2023), Ansoff Matrix, [Online] Available at: https://corporatefinanceinstitute.com/resources/management/ansoff-matrix/ [Accessed on 13^th November 2023]
3. Hanlon A. (2021), The Ansoff Model, [Online], Available at: https://www.smartinsights.com/marketing-planning/create-a-marketing-plan/ansoff-model/ [Accessed on 13^th November 2023]