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Understanding Ansoff's Matrix

There are several different ways of analysing the various marketing strategies. The Ansoff matrix examines strategies in terms of the products offered and the markets a business competes . In the Ansoff matrix are four different strategies: marketing penetration, market development, product development and diversification.
Here is what the Ansoff matrix looks like:

Market Penetration 
This growth strategy is where the business focuses on selling existing products into existing markets. There are four main objectives:
  • Maintain/increase market share of current products.
  • Secure dominance of growth markets.
  • Restructure a mature market by driving out competitors.
  • Increase usage by existing customers.
Market Development
This growth strategy is where the business seeks to sell its existing products into new markets. Here are four possible ways of approaching this strategy:
  • New geographical; for example, exporting the product to a new country.
  • new product dimensions or packaging.
  • New distribution channels.
  • Different pricing policies to attract different customers or create new market segments (niche).
Product Development
This growth strategy is where the business aims to introduce new products into existing markets.

This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets.

This growth strategy is where the business markets new products into new markets.

This is an inherently more risk strategy because the strategy involves moving into markets in which the business has little or no experience in. For a business to adopt a diversification strategy, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks.

About Will Green

A student in England studying Automotive Engineering with Motorsport, Will created Ask Will Online back in 2010 to help students revise and bloggers make money. You can follow AskWillOnline via @AskWillOnline.

4 comments so far:

  1. Every business and California LLC has their own way to track progress and profit. This method sounds very effective and convenient.

  2. Will
    Please may I use your Ansoff Matrix within a presentation I would like to make on YouTube? I am not charging for the presentation, but I would not wa.nt to breach any copyright

  3. Will, please may I use your Ansoff Matrix diagram in a presentation I intend to upload onto youtube? I do not want to infringe any copyright. My presentation will not involve any payment. I am happy to attribute the diagram design to you at askwillonline